Lidl UK GMBH V RG Carter Colchester Ltd
Technology and Construction Court
8th November 2012
The adjudicator awarded the employer liquidated damages at the full contractual rate for the period up to when it had issued “partial completion” certificates and at a reduced rate for the subsequent period. It was common ground that the adjudicator did not have jurisdiction to award liquidated damages at the full contractual rate. The employer sought to have the adjudicator’s award of liquidated damages at the reduced rate enforced.
Edwards-Stuart J held that the adjudicator’s award of liquidated damages at the full contractual rate which he had no jurisdiction to make should be severed from his award of such damages at a reduced rate for a different period which he did have jurisdiction to make. His reason for so deciding was that the reasoning which underpinned the award of liquidated damages at the full contractual rate had no bearing on the issues properly before the adjudicator.
In so holding Edwards-Stuart J made some general observations on the general principle that a decision cannot be severed where only one dispute or difference has been referred. He stated that the rationale underlying this principle is that where a single dispute or difference has been referred, it will generally be difficult to show that the reasoning in relation to the part of the decision being sought to sever had no impact on the reasoning leading to the decision actually reached or that the actual outcome would still have been the same. If this cannot be shown, the part cannot safely be severed from the whole. However, where additional questions are brought in and adjudicated upon, whether by oversight or error, there should be no reason in principle why any decision on those additional questions should not be severed provided that the reasoning giving rise to it does not form an integral part of the decision as a whole. If this cannot be shown, the entire decision will be unenforceable.