Not Arbitration, Not Cricket

Since most construction arbitrators are also Adjudicators or Wannabes, it is valid to refer in this journal to the judgement in Macob Civil Engineering Ltd v Morrison Construction Ltd handed down by Mr Justice Dyson in the T & CC on 12 February 1999. This appears to remove the question which has been concerning the industry as to how Adjudicator's decisions will be enforced under the Construction Act, particularly in view of the Halki Shipping v Sopex Oils case, in which summary judgment, where there is no arguable defence, was refused and a stay was ordered under the 1996 Arbitration Act.

Whereas Macob now appears to resolve the question, it has to be remembered that Morrison have been given leave to appeal. Whether or not they do so, we have not heard the last of it. Moreover, the case may be said to have been decided on its own particular facts, since lawyers will no doubt be looking for ways of reversing a tide which is now running counter to their interests and in favour of the interests of the construction industry generally.

The full judgment in Macob merits careful reading. This is not the place for a full analysis (maybe that is a matter for the future if a decision emerges from the Court of Appeal) but the following points are of significance.

Macob had alleged that they were owed some £300,000 as an interim payment in respect of groundworks for a retail development for which Morrison were the main contractor. The judge thought that the relief he ought to grant was a declaration that the decision of the Adjudicator was binding until the dispute was finally determined by arbitration, by legal proceedings or by agreement. Therefore Morrison were required by the Adjudicator's decision to pay the sums identified by the Adjudicator and were now in default.

Council for Morrison argued that the Adjudicator had not conducted the adjudication in accordance with the rules of natural justice: moreover, it was argued the decision was not enforceable unless, and only to the extent that, it was confirmed by the arbitrator following reference to arbitration. The judge found that even if there was a challenge to the validity of the Adjudicator's decision, the decision was binding and enforceable as a contractual obligation until it was determined by an arbitrator. The Adjudicator was required by statute to act impartially, and the Construction Act, like the 1996 Arbitration Act, entitled him to take the initiative in ascertaining the facts and the law. Whether the Adjudicator had breached the rules of natural justice the judge did not appear to decide, but this seems to be of little concern. If the decision on the issue referred to the Adjudicator was wrong, whether because he erred on the facts or the law, or because in reaching his decision he made a procedural error which invalidated the decision, it was still a decision on the issue, and therefore enforceable.

The judge said it was clear that Parliament intended that adjudication should be conducted in a manner which those familiar with the grinding detail of the traditional approach to the resolution of construction disputes apparently find difficult to accept.

An adjudicator is rather like someone going in to bat at Lord's, wearing size 15 hobnail boots and carrying a bludgeon instead of a bat, stepping onto hallowed ground. The purists have already written quite sufficient to persuade us that adjudication isn't cricket, but does it matter? Those whose interests are paramount are the parties, not the lawyers, and if the dispute can be shut down by a streetwise construction professional then that must be a good thing for the construction industry. At least the parties will be given time to consider what the cost, to say little of the consumption of valuable manpower resources, might be if they decide to pursue the dispute along the unattractive course of arbitration, which despite the intention of the 1996 Act still seems to be conducted like legal proceedings without wigs.