Nordot Engineering Services Limited -v- Siemens plc
The parties conferred ad hoc jurisdiction on the adjudicator to make a binding determination whether the sub-contract work was excluded from being a "construction operation" by section 105(2)(c) of the 1996 Act
14 April, 2000
The main contract works included the provision of a gas turbine generating plant. A payment dispute arose. The sub-contractor gave notice of adjudication. The contractor's response was that the sub-contract was not a "construction contract" within the meaning of the Construction Act 1996. A representative of the contractor wrote to the adjudicator stating that (1) the sub-contractor's work was purely mechanical works and (2) section 105(2) excluded from "construction operations" such work on a site whose primary activity was power generation. The issue for determination was whether the parties had conferred ad hoc jurisdiction on the adjudicator to make a binding determination as to whether the sub-contract work at the gas turbine generating plant was excluded from being a "construction operation" by the operation of section 105(2)(c) (and therefore whether the sub-contract was a "construction contract" within the meaning of the Act). Judge Gilliland held that the parties had conferred ad hoc jurisdiction on the adjudicator. This was on the basis that whilst the contractor's representative clearly and unambiguously informed the adjudicator that the sub-contract work was so excluded, he had also stated that the contractor would nevertheless abide by and comply with the adjudicator's decision in this connection. Notwithstanding that the contractor's representative was a businessman (and not a lawyer), it was clear from the correspondence that he was fully aware that there existed the section 105(2)(c) exclusion and was willing to abide by the adjudicator's decision in this respect. The contractor's representative sought an extension of time following the adjudicator's determination as to his jurisdiction and this request could be construed as the contractor accepting the adjudicator's jurisdiction in adopting his procedure by analogy to arbitration proceedings. Whilst the contractor again raised the issue of the adjudicator's jurisdiction by making detailed submissions in this connection in its response to the sub-contractor's substantive claims, there was nothing in the contractor's response to indicate that it was resiling from its representative's statements. Advice Note If the parties confer on the adjudicator ad hoc jurisdiction to decide fundamental questions such as whether the contract is a ?construction contract? within the meaning of the Construction Act, the courts will be very unwilling not to enforce the adjudicator's decision based on that jurisdiction.