We have all heard of the usual adjudicator nominating bodies such as RICS, RIBA, TeCSA and so forth. But what if one party to the construction contract named itself as the adjudicator nominating body?
This is what happened in Sprunt v London Borough of Camden.
Sprunt carried out consultancy services for the Council under a Framework Agreement which provided that the Council would be the “specified nominating body” for the purposes of a referral to adjudication.
When a dispute arose, Sprunt commenced adjudication proceedings and applied to the RICS for the nomination of an adjudicator.
The Council raised a jurisdictional challenge and resisted enforcement proceedings partly on the basis that Sprunt had used the wrong nominating body.
In the event, the Court’s decision to reject the Council’s argument was easy. As other terms of the adjudication provisions in the Framework Agreement were not compliant with the Construction Act, the Scheme adjudication provisions were implied.
Whilst the Scheme states that the referring party shall request the nominating body specified in the contract to select a person to act as adjudicator, it also states that the nominating body shall not be a “natural person” or a “party to the dispute”. Consequently the jurisdiction challenge failed.
Interestingly however, the Court went on to say that as a matter of policy it would be unsatisfactory for one of the parties to the dispute to act as the adjudicator nominating body. Whilst it accepted that it would be possible for a party to nominate an entirely neutral and independent person to act as adjudicator, there was too much of a risk that it could or would nominate someone who would either be sympathetic to its position, or even someone whose fees might be so high as to act as a deterrent to the referring party.
COMMENT: The Court has given clear guidance that one party to a construction contract cannot assume the role of adjudicator nominating body. If the parties require a particular nominating body, it should be named in the contract. This is even more important under the amended Construction Act which encompasses oral contracts. Where no nominating body is specified, the parties may go to a nominating body of their choosing.
Author: James Coppinger, Head of Construction and Engineering.
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