Ecovision Systems Ltd v Vinci Construction UK Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Havelock-Allan |
| Judgment Date | 11 March 2015 |
| Neutral Citation | [2015] EWHC 587 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Claim No. A40BS409 |
| Date | 11 March 2015 |
[2015] EWHC 587 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BRISTOL DISTRICT REGISTRY
TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Havelock-Allan QC
Claim No. A40BS409
Andrew Kearney (instructed by RPC) appeared for the claimant
Mark Smith (instructed by Systech Solicitors) appeared for the defendant
His Honour Judge Havelock-Allan Q.C.
By this Part 8 claim the claimant ("Ecovision") seeks a declaration that the decision of an adjudicator, Mr Jensen, is of no effect and that Ecovision is not obliged to comply with it.
It is common ground that Mr Jensen was appointed to resolve a dispute arising under a construction contract, as defined in s. 104(1) of the Housing Grants, Construction and Regeneration Act 1996 (the " HGCRA"). Ecovision's complaint is that neither the defendant ("Vinci"), who requested adjudication, nor Mr Jensen, until the adjudication process had largely run its course, would say under which of 3 possible sets of terms the adjudication had been instituted. Vinci says that this does not matter. Ecovision says that identification of the terms under which Mr Jensen was appointed and under which he purported to act goes to the heart of his jurisdiction.
Vinci is a building contractor who, on or about 8 December 2010, entered into a sub-contract with Ecovision under which Ecovision agreed to carry out the design, supply and installation of a ground source heating and cooling system for an office development called Vanguard House on the Daresbury Science and Innovation Campus in Cheshire ("the Sub-Contract"). Vinci was the main contractor for the development under a contract with the Northwest Development Agency dated 19 February 2010 ("the Main Contract"). Vanguard House was referred to in the main contract documentation as "Daresbury Building 3".
The contract terms
The Main Contract was based upon the NEC3 Engineering and Construction Contract (June 2005 with amendments in June 2006) and incorporated the Main Option C clauses of that contract form (Target contract with Activity Schedule), all as amended by the Northwest Development Agency ("the employer").
The Sub-Contract was based upon the corresponding NEC3 Engineering and Construction Sub-Contract and 16 Appendices. So far as is relevant, Part One of the Sub-Contract Data in the NEC3 Sub-Contract form ("Data provided by the Contractor") was filled in by Vinci so that it read as follows (the manuscript insertions in the printed form are reproduced here with underlining):
"1. General
• The conditions of contract are the core clauses and the clauses for main Option A, dispute resolution Option … and secondary Options X7, X16, X 17 and Y (UK) 2 of the NEC2 Engineering and Construction Subcontract June 2005 (with amendments June 2006). All as amended by the numbered documents in Appendix 1 annexed hereto.
…
• The Adjudicator in this subcontract is
Name: The President of the Royal Institute of Chartered Surveyors
…
• The Adjudicator nominating body is
As Appendix 6 annexed hereto
…
9. Options statements
• If Option Z is used
The additional conditions of subcontract are All as detailed in the numbered documents in Appendix 1 annexed hereto."
The only standard core clauses of the NEC3 Sub-Contract Form which featured in argument are:
"10.1 The Contractor and the Subcontractor shall act as stated in this subcontract and in a spirit of mutual trust and co-operation.
11.1 In these conditions of subcontract, terms identified in the Subcontract data are in italics and defined terms have capital initials."
Main Option A incorporated the clauses for a "Priced subcontract with activity schedule". None of these clauses matters for present purposes.
Where (as here) the Sub-Contract is governed by the HGCRA, the dispute resolution Option in the NEC3 Sub-Contract Form is Option W2. Option W2, so far as is material, provides:
"W2.2
…
(3) If the Adjudicator is not identified in the Subcontract Data or if the Adjudicator resigns or becomes unable to act
• the Parties may choose an adjudicator jointly or
• a Party may ask the Adjudicator nominating body to choose an adjudicator
The Adjudicator nominating body chooses an adjudicator within four days of the request. The chosen adjudicator becomes the Adjudicator.
…
W2.3
(1) Before a Party refers a dispute to the Adjudicator, he gives notice of adjudication to the other Party with a brief description of the dispute and the decision which he wishes the Adjudicator to make. If the Adjudicator is named in the subcontract data, the Party sends a copy of the notice of adjudication to the Adjudicator when it is issued. Within three days of the receipt of the notice of adjudication, the Adjudicator notifies the Parties
• that he is able to decide the dispute in accordance with the subcontract or
• that he is unable to decide the dispute and has resigned.
If the Adjudicator does not so notify within three days of the issue of the notice of adjudication, either Party may act as if he has resigned.
(2) Within seven days of a Party giving notice of adjudication he
• refers the dispute to the Adjudicator,
• provides the Adjudicator with the information on which he relies, including any supporting documents and
• provides a copy of the information and supporting documents he has provided to the Adjudicator to the other Party.
Any further information from a Party to be considered by the Adjudicator is provided within 14 days of the referral. This period may be extended if the Adjudicator and the Parties agree.
…
(4) the Adjudicator may
• review and revise any action or inaction of the Contractor related to the dispute and alter a quotation which has been treated as having been accepted,
• take the initiative in ascertaining the facts and the law related to the dispute,
• instruct a Party to provide further information related to the dispute within a stated time and
• instruct a Party to take any other action which he considers necessary to reach his decision and to do so within a stated time.
…
(8) The Adjudicator decides the dispute and notifies the Parties of his decision and his reasons within twenty-eight days of the dispute being referred to him. This period may be extended by up to fourteen days with the consent of the referring Party or by any other period agreed by the Parties.
…
(10) If the Adjudicator does not make his decision and notify it to the Parties within the time provided by this subcontract, the Parties and the Adjudicator may agree to extend the period for making his decision. If they do not agree to an extension, either Party may act as if the adjudicator has resigned."
Secondary Option Y(UK)2 in the NEC3 form provides definitions drawn from the HGCRA. For present purposes, the only relevant clause in Option Y(UK)2 is clause Y2.1(2) which provides that: "A period of time stated in days is a period calculated in accordance with Section 116 of the Act".
It is common ground that Secondary Option Z was used. Option Z covers "Additional Conditions of subcontract". Clause Z1.1 provides that: "The additional conditions of subcontract stated in the Sub-Contract Data are part of this contract". The insertion in manuscript of the words: "All as detailed in the numbered documents in Appendix 1 annexed hereto" under Option Z in the Sub-Contract Data had the consequence that all the terms in the numbered documents in Appendix 1 were incorporated into and became part of the Sub-Contract. The numbered documents in Appendix 1 were stated as comprising, amongst others, "The Description of Works". The Description of Works was in turn defined as consisting of: (1) Preliminaries Pages as per Document A annexed to Appendix 1 (2) Preambles/Specification pages as per Document B annexed to Appendix 1, (3) The Bills of Quantities/The Schedule of Rates/Prices pages as per Document C annexed to Appendix 1 and (4) Details of Performance Specified Work. Document A contained pages 1 – 50 of the Main Contract. Thus Option Z, via Appendix 1 and Document A, had the effect of incorporating pages 1–50 of the Main Contract into the Sub-Contract.
Pages 1–50 of the Main Contract included the following clauses which have a bearing on the issues raised by the present claim: (1) Dispute Resolution Option W2 and (2) clause Z16 of the Schedule of Amendments to the Main Contract. The wording of Option W2 in the Main Contract was the same as the wording of Option W2 in the Sub-Contract. However Option W2 in the Main Contract was amended by clause Z16 as follows:
"DISPUTE RESOLUTION PROCEDURE
Z16.1 Delete main option clauses W2.1, W2.2, W2.3 and W2.4.
Z16.2 Insert the new main option clauses as follows:
"W2.1 The proper law of this contract is English law. The courts of England have jurisdiction in relation to this contract, and a court or judge thereof has jurisdiction to open up review and revise any decision or opinion or certificate under the contract.
W2.2 Where pursuant to this contract or Part II of the Housing Grants, Construction and Regeneration Act 1996 a dispute or difference is referred to adjudication, that adjudication is governed by and conducted in accordance with the Adjudication Rules of the Technology and Construction Solicitors Association, which are incorporated herein by reference. The decision of the adjudicator is binding on the parties until the dispute or difference is finally determined by a court or judge thereof.
W2.3 Any reference in the contract to arbitration or to an arbitrator is deleted and substituted with a reference to the English courts or a judge thereof.""
Of the other Appendices to the Sub-Contract, Appendix 2 and Appendix 6 are relevant.
Appendix 2, entitled "Amendments and Additions to the Subcontract Conditions", contained a clause to...
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