Cases - Shimizu Europe Ltd v Automajor Ltd

Record details

Name

Shimizu Europe Ltd v Automajor Ltd

Date

[2002]

Citation

BLR 113

Legislation

TeCSA Rules 1999

Keywords

Construction contracts - adjudication - adjudicator's decision - slip rule - mistake in arithmetic/calculation - whether mistake went to jurisdiction - waiver - whether part payment against award constituted waiver

Summary

Shimizu had agreed to undertake works for Automajor involving the design and construction of a three-storey building. Disputes arose as to the entitlement of Shimizu to additional payment, which Shimizu referred to adjudication. The adjudicator decided that Shimizu were entitled to an additional sum of £321,300.99. Automajor failed to pay, so Shimizu commenced proceedings to enforce that decision and applied for summary judgment.

From the reasons given by the adjudicator it was apparent that he had included in his decision an amount of approximately £162,000 in respect of alleged variations, which he had held were not variations. Further, he had made no allowance for a without prejudice payment on account in connection with the alleged variations of £50,000.

Solicitors acting on behalf of Automajor had, immediately after receipt of the adjudicator's decision, written to the adjudicator asking him to correct his decision under the slip rule. However, the adjudicator did not accept that there had been any slip or error in his decision and therefore refused to do so.

Automajor sought to argue that the mistakes made by the adjudicator went to his jurisdiction and vitiated his determination. The judge held that this line of argument was not correct and that the adjudicator's mistakes did not go to his jurisdiction. However, the judge was satisfied that the reason that the adjudicator had awarded sums in respect of alleged variations, which he had held were not variations, was that the adjudicator had formed the belief that the parties had extended his jurisdiction so as to enable him to take account of Shimizu's claim in relation to these variations, which would not otherwise have been proper.

As far as this line of argument was concerned, the judge concluded that the adjudicator had been asked to decide what sum was payable by Automajor to Shimizu, and he had answered that question. If the adjudicator had made a mistake as to the evaluation of what sum, if any, should be paid, that was not a mistake as to what he was being asked to decide. He asked himself the correct question and he answered that question. The proper mechanism for correcting an error, if there is one, is in the course of a final accounts negotiation or in arbitration proceedings; it is not to challenge the award on jurisdictional grounds.

The judge therefore gave judgment for Shimizu.

The judge then went on to consider Shimizu's alternative argument, which was that Automajor had made a part payment against the adjudicator's decision and in so doing had waived their rights to object to it. The judge concluded, in this respect, that it cannot be right that it is open to a party to an adjudication simultaneously to approbate and to reprobate a decision of the adjudicator. Assuming that good grounds exist in which a decision may be subject to objection, either the whole of the relevant decision must be accepted or the whole of it must be contested.