Cases - John Mowlem & Co v Hydra-Tight Ltd
Record details
- Name
- John Mowlem & Co v Hydra-Tight Ltd
- Date
- (2001)
- Citation
- 17 Const. L.J. 358
- Legislation
- Keywords
- Adjudication - ICE contract - subcontract - New Engineering Subcontract - Housing Grants, Construction and Regeneration Act 1996 s.108
- Summary
-
Hydra-Tight purported to refer a dispute in relation to their entitlement to payment to adjudication. Mowlem made an application to the court for a declaration that the adjudicator did not have jurisdiction. The contract was the New Engineering Subcontract published by the Institution of Civil Engineers.
An issue arose as to whether the subcontract was compliant with the Act. Hydra-Tight sought to refer it to adjudication, applying first to RICS and then the Institution of Civil Engineers (ICE). Mowlem sought a declaration that the adjudicator, nominated by the ICE, did not have jurisdiction. The judge concluded that the subcontract was not compliant with the Act since the subcontract purported to defer the referral of a dispute to adjudication by 4 weeks pursuant to a mechanism by which the parties would first serve a notice of dissatisfaction.
HH Judge Thornton QC awarded a declaration preventing any further steps from being taken, on the grounds that the adjudicator had not been nominated in accordance with the contract. However, it was held that a contract provision seeking to delay adjudication for 4 weeks pending notification of 'dissatisfaction' was illegal. This is an important ruling, as such provisions were at one time typical of ICE contracts. If part of the procedure for adjudication is deemed illegal, then the whole procedure fails and the provisions of the Scheme for Construction Contracts apply.
Having reached this conclusion, it was necessary for the judge to consider whether, if some parts of the subcontract comply with the Act, they can be retained and the Act can be used in substitution for, or to fill in, those parts of the subcontract that are contrary to the Act. The judge concluded that the words of the Act are clear - either the parties comply in their own terms and conditions with the requirements of the Act or the provisions of the Scheme apply.
Provided that the procedure agreed in the contract complies with the provisions of section 108(2) of the Act, the parties may agree other supplementary provisions that can dramatically affect the costs or benefits of adjudication.