Amec Group Ltd v Thames Water Utilities Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 24 February 2010 |
| Neutral Citation | [2010] EWHC 419 (TCC) |
| Docket Number | Case No: HT-10–39 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 24 February 2010 |
[2010] EWHC 419 (TCC)
Before: Mr. Justice Coulson
Case No: HT-10–39
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St. Dunstan's House
133–137 Fleet Street
London EC4A 1HD
Mr. Simon Hargreaves Qcand Lucy Garrett (Instructed By Messrs. Nabarro Llp) For The Claimant
Mr. Anthony Speaight Qc (Instructed By Messrs. Charles Brown Solicitors) For The Defendant
A. INTRODUCTION
This is a claim by AMEC to enforce, by way of summary judgment, an adjudicator's decision dated 24 th December 2009 for just less than £1 million. The claim originated in a Framework Agreement dated February 2005, pursuant to which AMEC were engaged by TWUL to carry out construction and maintenance work. Each separate package of work was the subject of a separate order, referred to in the papers as a “works order” or “works contract”. There were apparently over 300,000 such orders/contracts let under the Framework Agreement.
In response to this claim for summary judgment, TWUL rely on a variety of separate reasons why the adjudicator's decision should not be enforced. There are three lever arch files of documents and two files of authorities. The submissions of the parties extended to a detailed analysis of the submissions in the adjudication as well as the inter partes correspondence. In my judgment, that kind of detailed analysis is not appropriate on an application to enforce an adjudicator's decision, just as it would not be appropriate on an application for permission to appeal against an arbitrator's award under section 69 of the Arbitration Act 1996. I would add that, at least in general terms, the greater the detail that a defendant invites the court to consider in resisting an application of this kind, the less likely it must be that it is the kind of “plain case” necessary to avoid enforcement.
I propose to deal with the issues that arise on this application in this way. First, I set out the details of the Framework Agreement ( Section B below) and a brief chronology ( Section C below). At Section D I set out some general principles relating to the enforcement and adjudication decisions.
Thereafter, I deal with the various reasons put forward by TWUL as to why the decision in this case should not be enforced in the following sequence:
Jurisdiction (Section E below)
Did the dispute arise under the Framework Agreement? If not, TWUL say that the adjudicator did not have the jurisdiction to deal with this dispute. They maintain that the disputes arose across a whole series of works contracts and that therefore the adjudicator appointed under the Framework Agreement did not have the jurisdiction to make a money decision. In addition, they say that, if the dispute did not arise under the Framework Agreement, the ICE adjudication procedure, pursuant to which this adjudication was conducted, did not comply with the Housing Grants (Construction and Regeneration) Act 1996 (“the 1996 Act”) and/or the adjudicator purported to deal with more than one dispute at the same time.
Natural Justice (Section F below)
Did the adjudicator act in breach of natural justice:
(a) In dealing with the dispute at all, given its alleged complexity and the late provision of documentation;
(b) In respect of TWUL's further response, sent just over two days before the adjudication decision had to be provided?
Error: Failure to Address Issue/ Error (Section G below)
Did the adjudicator make an error and/or fail to deal with TWUL's defence to the claims brought by AMEC, such that he failed to ask himself the right question and/or failed to conduct the adjudication fairly?
5. There are two final areas of argument: an issue as to approbation and reprobation, and a point about severability. I address these in Section H below. There is a short summary of my conclusions at Section I below. Although the range of matters raised on this application has made it feel rather like an exam question or an obstacle course, I should express my thanks to both leading counsel for their considerable assistance.
B. THE FRAMEWORK AGREEMENT
The parties entered into a Framework Agreement in February 2005. Section A comprised the Form of Agreement and a number of annexures. Section B comprised the specification, and Section C constituted the conditions of the works contracts. Clause 2 of Section A recorded the basic agreement between the parties in these terms:
“b) This Agreement enables Thames Water to award contracts (referred to in this agreement as ‘Contracts’ and each one a ‘Contract’) to the Contractor for the provision of services and/or the execution of works pursuant to and within the scope of this Agreement.
c) This Agreement constitutes a standing offer from the Contractor to Thames Water to provide services and/or execute works as described in Section A2 and shall remain open for acceptance by Thames Water for as many times as Thames Water chooses during the currency of this Agreement. An individual Contract shall be made by Thames Water issuing to the Contractor an order in the form set out in Section A4 or in an emergency by issuing an oral instruction to the Contractor in either case in accordance with the procedure set out in section A4 and either of which shall constitute an acceptance by Thames Water and the Contractor's standing offer. The Contract shall be made on the date that Thames Water issues an order.
d) The core terms governing this Agreement and the performance of a Contractor's obligations under this Agreement and any Contracts entered into pursuant to it, are set out in Annex 2. In addition, the Conditions of Contract set out in Section C shall apply to any Contracts entered into pursuant to this Agreement.”
Annex 1 contained a list of documents constituting the Framework Agreement. This included extracts from the tender summary letter of 19 th January2005 which contained details of rates, start-up payments and the like.
Annex 2 was entitled “Terms Governing The Agreement And Any Contracts”. They were the important terms governing the performance of the Framework Agreement. Two parts of Annex 2 are particularly relevant for these purposes: clauses 9 and 12.
Clause 9 set out a detailed payment mechanism which included the following:
“9.1.1 Following completion of the services and/or works to be performed by the Contractor under any Contract awarded pursuant to this Agreement, the Contractor shall complete a Payment Application in the form prescribed by Thames Water's payment system, the format of which is set out in Section A4. The Contractor shall submit a bundle comprising of all payment applications completed in each calendar month to Thames Water within seven days after the end of the relevant calendar month. …
9.2 Thames Water shall verify the accuracy of all the payment applications received and, subject to paragraph 9.7, a single aggregated payment in respect of all such applications properly made out and received from the Contractor in relation to each calendar month shall become due 14 days after the date on which the relevant applications are received by Thames Water. The final date for payment shall be 28 days after the date on which the relevant applications are received and in accordance with Section A4 subclause 4, 4.10 …
9.4 Without prejudice to any other remedy which it may have, Thames Water shall be entitled (subject to paragraph 9.5) to deduct from any payment due to the Contractor any sum which is due from the Contractor to Thames Water under the same Contract or a different Contract awarded under this Agreement.
9.5 If Thames Water intends to withhold any amount from or set off any amount against any payment which is due to the Contractor, including any deduction as provided for in paragraph 9.4, Thames Water shall give notice to the Contractor not later than five days before the final date for payment specifying the amount it proposes to withhold and the ground for withholding payment. If there is more than one ground such notice shall specify separately each ground and the amount attributable to it.”
Accordingly, the payment provisions of the Framework Agreement expressly envisaged an aggregated claim, an aggregated verification of payment and an aggregated withholding notice.
Clause 12 set out the adjudication procedure incorporated within the Framework Agreement. It was in this form:
“12.2 Notwithstanding the provisions of paragraph 12.1 either party may at any time refer any dispute or difference arising out of or in connection with this Agreement to adjudication. Such an adjudication shall be conducted in accordance with the Institution of Civil Engineers Adjudication Procedure 1997 or any published amendment thereof, which procedure shall form part of this Agreement.
12.3 Subject to paragraph 12.2 either party may refer any dispute or difference arising out of or in connection with this Agreement to the arbitration of a person to be agreed upon between the parties or, failing agreement, within six weeks to some person appointed on the application of either party by the President for the time being of the Chartered Institute of Arbitrators. Such arbitration shall be conducted in accordance with the Institution of Civil Engineers Arbitration Procedure 1997 or any published amendment thereof, which procedure shall form part of this Agreement.
12.4 Any dispute or difference arising out of or in connection with any Contract awarded pursuant to this Agreement shall be resolved in accordance with the Dispute Resolution provisions contained in the relevant Conditions of Contract.”
It is convenient here just to identify the relevant parts of the ICE adjudication procedure expressly referred to in clause 12. The general principles set out at clause 1.1 of the procedure include the...
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