Cases - Orange EBS Ltd v ABB Ltd

Record details

Name

Orange EBS Ltd v ABB Ltd

Date

[2003]

Citation

BLR 323

Keywords

Adjudication - adjudicator - construction contract - jurisdiction - jurisdiction of adjudicator - enforcement - enforcement of adjudicator's decision - notice of intention to refer - dispute at time of notice of intention to refer

Summary

Orange were a subcontractor to ABB in connection with works at the John Radcliffe Hospital in Oxford. Disputes arose as to entitlement to payment, and subsequently Orange withdrew from the site on the basis that their works were completed.

By letter dated 6 July 2002 ABB purported to terminate Orange's subcontract on the basis that the works were not complete. By letter dated 10 July 2002 Orange referred to the dispute that now existed between themselves and ABB.

By letter dated 2 December 2002 Orange denied that they had abandoned the site and contended that ABB had wrongfully denied them access to site and/or terminated the subcontract. Orange enclosed their final account, seeking a gross valuation of £270,417. Orange also included a formal notice of intention to refer the matter to adjudication.

By letter dated 12 December 2002 ABB's solicitors wrote to Orange's representative contending that there was no extant dispute between the parties at that stage capable of adjudication because ABB had not had an opportunity to consider Orange's final account. They said that ABB would have completed the review of the final account by 20 January 2003.

By letter dated 6 January 2003 Orange's representatives served a formal notice of intention to refer to adjudication claiming the same redress as in their notice to adjudicate dated 2 December 2002.

On 9 January 2003 an adjudicator was appointed and on 14 February 2003 he gave his first decision, concluding that ABB had wrongfully terminated Orange's subcontract. He gave his second and final decision on 4 March 2003. The adjudicator decided that Orange were entitled to a total sum of £90,283.77 plus VAT.

This application for summary judgment was brought by Orange by way of enforcement of the adjudicator's decision. The application was resisted by ABB on the ground that no dispute had arisen at the time that the notice of intention to adjudicate was served on 6 January 2003. Not only had ABB said that they would need until 20 January 2003 to review the final account, but the contractual mechanism allowed them time from submission of the subcontractor's final account to review that information and respond. That period had not expired, so no dispute had arisen.

The judge concluded that the termination of Orange's contract brought the final account process to an end. Further, and notwithstanding the fact that ABB had said that they would have the response ready by 20 January 2003, the judge concluded that by 6 January 2003 sufficient time had elapsed for evaluation and discussion or negotiation of Orange's claim. He reached that conclusion notwithstanding that the holiday period intervened. The judge concluded that by 6 January 2003 the process of negotiation and discussion of Orange's claim had come to an end, so that a dispute then arose.

Therefore, the adjudicator had jurisdiction to decide as he did and Orange were entitled to judgment.

The Court held that:

(1) the repudiation had brought the sub-contract to an end, and therefore its provisions on the timing of dealing with payment no longer applied;

(2) applying the 'simple test in Halki v Sopex', a dispute had arisen at the time the notice of adjudication was issued, as ABB had not admitted nor paid the claim;

(3) applying the Sindall v Solland test was more difficult, but at the date of the adjudication notice, sufficient time had elapsed for evaluation and discussion or negotiation of Orange's claim.