Anglian Water Services Ltd v Laing O'Rourke Utilities Ltd
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Edwards-Stuart |
| Judgment Date | 25 June 2010 |
| Neutral Citation | [2010] EWHC 1529 (TCC) |
| Docket Number | Case No: HT-10–144 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 25 June 2010 |
[2010] EWHC 1529 (TCC)
Before: The Hon Mr Justice Edwards-Stuart
Case No: HT-10–144
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Andrew Wales and Sarah Martin (instructed by CMS Cameron McKenna LLP) for the Claimant
David Streatfeild-James QC (instructed by Pinsent Masons) for the Defendant
Hearing date: 25/05/2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HONOURABLE MR JUSTICE EDWARDS-STUART
The Hon Mr Justice Edwards-Stuart:
Introduction
This is the hearing of an arbitration claim by which the Claimant, Anglian Water Services Ltd (“AWS”), applies for
1.1 A declaration that AWS validly notified its intention to refer a dispute to arbitration by 23 March 2010 and therefore in time; alternatively
1.2 An extension of time for taking that step until 30 March 2010 or such other date as the court may permit, pursuant to section 12 of the Arbitration Act 1996.
By a contract that incorporated the terms of the 2 nd Edition (1995) of the NEC Engineering and Construction Contract AWS engaged the Respondent, Laing O'Rourke Utilities Limited (“LOR”), to design and construct a number of tanks at AWS's Saltfleet Sewage Treatment Works (“SSTW”).
It was common ground that the adjudication provisions in the contract did not comply with Part II of the Housing, Grants, Construction and Regeneration Act 1996 (“ HGCRA”) with the result that the Adjudication provisions in the Scheme for Construction Contracts (“the Scheme”) replaced the adjudication provisions in the contract. This was for the simple reason that the provisions in the contract did not permit a party to the contract to refer a dispute to adjudication “at any time” as section 108 of HGCRA requires.
Clause 93.1 of the Core Clauses provided for arbitration in the following terms (the reference to tribunal in the clause means arbitration and words in italics are defined in terms in the contract):
“If after the Adjudicator
• notifies his decision or
• fails to do so
within the time provided by this contract a Party is dissatisfied, that Party notifies the other Party of his intention to refer the matter which he disputes to the tribunal. It is not referable to the tribunal unless the dissatisfied Party notifies his intention within four weeks of
• notification of the Adjudicator's decision or
• the time provided by this contract for this notification if the Adjudicator fails to notify his decision within that time
whichever is the earlier. The tribunal proceedings are not started before Completion of the whole of the works or earlier termination.”
It is alleged by LOR that AWS failed to serve a valid notice of dissatisfaction under clause 93.1 within four weeks of a decision of the adjudicator, Dr Robert Gaitskell QC. The failure did not consist of a failure to send the document to LOR within the prescribed four weeks, but a failure to send it to what LOR contends to be the correct address for service.
LOR relies on clause 13 of the Core Clauses, the relevant parts of which provide as follows:
“Communications 13
13.1 Each instruction, certificate, submission, proposal, record, acceptance, notification and reply which this contract requires is communicated in a form which can be read, copied and recorded. Writing is in the language of this contract.
13.2 A communication has effect when it is received at the last address notified by the recipient for receiving communications or, if none is notified, at the address of the recipient stated in the Contract Data.
13.3 If this contract requires the Project Manager, the Supervisor or the Contractor to reply to a communication, unless otherwise stated in this contract, he replies within the period for reply.
…
13.7 A notification which this contract requires is communicated separately from other communications.”
I will have to go into the facts in some detail later in this judgment, but what happened in outline was that at 16:19 on 22 March 2010 AWS's solicitors, CMS Cameron McKenna (“CMS”), sent a letter by fax to LOR's solicitors, Pinsent Masons (“PM”), which was a notice of dissatisfaction with the decision of Dr Gaitskell issued on 24 February 2010, together with a separate Notice to Refer a Dispute to Arbitration. This was acknowledged by an e-mail at 17:03 the same day from Andrew Shelling of PM saying “I confirm safe receipt of your fax sent earlier today”.
PM then forwarded the documents to their clients and it is not in dispute that they went straight into the hands of the two individuals at LOR who were responsible for handling the dispute with AWS. The four week time limit for serving the notice of dissatisfaction expired at the end of the following day (or, possibly, the day after).
Having received the acknowledgement from PM, the partner and assistant at CMS—thinking that all was well—took no further steps in relation to further service of the documents. However, one week later, on 29 March 2010, CMS received a letter from PM saying that they would take instructions from their clients as to whether they were instructed to accept service and asking CMS to confirm that the relevant notice under clause 93.1 of the contract had been served on their clients in accordance with the contract.
The issues
These can be summarised as follows:
(1) Is clause 93.1 incompatible with Part II of HGCRA and of no effect? If not,
(2) Was delivery of the notice of dissatisfaction to PM within the four week period an effective communication of that notification under the contract? And, if not
(3) Since the notification of dissatisfaction was received by the relevant individuals at LOR within the four week period, did that of itself make it an effective communication under clause 13?
(4) If each of the above issues is answered in favour of LOR, should AWS be given an extension of time for service of the notice of dissatisfaction under section 12 of the Arbitration Act 1996?
Since the notice of dissatisfaction was subsequently served on LOR at the address given in the contract on 30 March 2010, that is the date to which AWS seeks an extension of time (if it needs it).
I will deal with the issues in the order in which I have set them out.
The validity of clause 93.1
The principal point made by Mr Andrew Wales, who appeared for AWS together with Miss Sarah Martin, was that since section 108(1) of HGCRA confers on a party to a construction contract the right to refer a dispute arising under the contract for adjudication under a procedure complying with the section, that must carry with it a right not to refer a dispute for adjudication but to refer it to some other method of dispute resolution.
At paragraph 62.3 of his skeleton argument Mr Wales put the point this way:
“A contract which requires a mandatory adjudication prior to the chosen means of final determination is non-compliant with the HGCRA. The adjudication for which the Scheme provides will not (as required) be permissive in nature if contract terms remain effective to make an adjudication mandatory prior to the final determination of any dispute.”
This is a short submission but unfortunately I cannot give it such a short answer. HGCRA provides that a contract must entitle each party to a construction contract to refer a dispute for adjudication at any time and it provides that the decision of the adjudicator will be binding until the dispute is finally determined by legal proceedings, or arbitration if that is what the contract provides, although the parties may agree to accept the decision of the adjudicator as finally determining the dispute.
The Adjudication provisions in the Scheme, which as I have already said have been incorporated into this contract, entitle any party to the contract to give written notice of his intention to refer any dispute arising under the contract to adjudication. But, as I have already noted, it is provided by section 108(2) of HGCRA that the contract must enable a party to give notice at any time of his intention to refer a dispute to adjudication. However, HGCRA is silent on the question of whether a referral to adjudication should be a precondition of starting proceedings in the courts or by way of arbitration, as appropriate. A contract that obliges a party to refer a dispute to adjudication before he can pursue it by either litigation or arbitration does not, in my view, impose any fetter on the right to refer a dispute to adjudication at any time. However, it does prevent a party from starting proceedings in the courts or by way of arbitration at any time, because he cannot do so without having first referred the dispute to adjudication.
HGCRA does not provide that a party to a contract has a right to start proceedings, either by way of litigation or arbitration, at any time and I cannot see any room for reading such a requirement into its provisions as a matter of construction. But that is effectively what Mr Wales is seeking to do: he just puts the point in a much more subtle way. His argument, when looked at more broadly, amounts to this: that Part II of HGCRA entitles any party to the contract to give notice of his intention to refer any dispute arising under the contract to arbitrationat any time. This it clearly does not do. Accordingly, I consider that there is nothing in the point that clause 93.1 cannot survive the provisions of Part II of HGCRA.
But Mr Wales has a further way of putting the point, albeit in a slightly different way. What he says is that “the requirement for...
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