Penten Group Ltd v Spartafield Ltd (TCC - 18.2.2016)
The employer sought various declarations in the adjudication, including that there was a valid construction contract and its terms included the provisions of JCT ICD 2011. The adjudicator decided that a valid construction contract existed but its terms were not those of the JCT contract but instead were those of the employer’s letter of intent. The employer served a notice of adjudication to begin another adjudication in which it sought a declaration that the adjudicator in the first adjudication was neither required nor had the necessary jurisdiction to decide the terms of the contract if he did not accept that they were those of JCT ICD 2011.
The contractor began Part 8 proceedings in which it sought a declarations that the decision in the first adjudication with regard to contract formation was enforceable and that any adjudicator appointed pursuant to the employer’s notice of adjudication in any future adjudication would not have jurisdiction on the ground that the matters referred had already been decided by the adjudicator.
Coulson J made the declaration sought with regard to contract formation but declined to make the declaration with regard to the alleged lack of jurisdiction in any future adjudication. He stated that it would not have been possible for the adjudicator in the first adjudication to decide whether there was a valid contract without deciding whether basic terms had been agreed and, if so, what precisely those terms were because a valid contract can only come into existence if there is agreement between the parties on certain basic matters. Whilst the employer did not refer to its letter of intent in the notice of adjudication (i) A claiming party cannot artificially restrict the responding party's defence to its claim by saying that because they made no reference to a particular point in the notice of adjudication, it therefore cannot arise for decision and (ii) It is not appropriate to construe a notice of adjudication in such a way as to deprive the responding party of a defence which, but for the wording, would be open to that party to raise. The adjudicator, having found that the contract did not incorporate the JCT ICD form had no sensible alternative but to find that its terms were as set out in the letter of intent because (i) There was at one point an intention to enter into the JCT ICD form but this did not happen and (ii) The adjudicator had to consider whether, even though the form had never been concluded, the incorporation of the terms had been agreed and decided that incorporation had not been agreed.