Blog: Should an adjudicator disclose knowledge of related cases?
The 2016 case of Beumer revolved around a major construction project at Gatwick Airport and provides clarity on whether an adjudicator should, during an adjudication, disclose to the parties that he or she is also acting as an adjudicator in a separate adjudication involving one of the parties, writes Alistair Dean at Anderson Strathern.
Gatwick Airport Ltd contracted with Vinci Construction UK Ltd (“Vinci”) as main contractor to carry out work at Gatwick Airport’s South Terminal and ‘Pier 1 - Phase 2’. Vinci then sub-contracted with Beumer Group UK Ltd (“Beumer”) to deliver the baggage handling system works at the airport. Beumer sub-contract some of their agreed works to another party, Daifuku Logan Ltd (“Logan”).
Both the main contract (NEC 3 Engineering and Construction Contract Option A) and the sub-contract (NEC 3 Engineering and Construction Sub-Contract Option A) identified the same panel of three adjudicators that could be used in the event of a dispute. Beumer subsequently found themselves in dispute with both Logan and Vinci.
Beumer claimed that, in accordance with their contract with Vinci, they should have been granted an extension of time as a compensation event had occurred. The adjudicator appointed in the dispute between Beumer and Vinci found in Beumer’s favour; he instructed Beumer to pay the adjudication fees and recoup those fees from Vinci. When Vinci refused to pay the adjudicator’s fees to Beumer, enforcement proceedings were raised.
Beumer also began a contemporaneous adjudication against Logan in which Beumer claimed liquidated damages due to the same issue that they believed gave them the right to an extension of time in their dispute with Vinci. The same adjudicator was appointed in both adjudications and Vinci was not made aware of this until after the decision against them had been issued.
Issues and outcome
The issues raised by Vinci were threefold:
The court found in favour of Vinci and that there had been a breach of natural justice. Importantly, the court also held that Vinci should have been informed of the adjudication against Logan and should have been given access to the material from the second adjudication. Without this access, the fairness of the appointment was vulnerable to challenge.
Of course, it should be a rare occurrence that two adjudications happen at the same time concerning a contractor, sub-contractor and sub-subcontractor. However, when disputes are so closely connected, parties should strongly consider whether there could be a breach of natural justice, as above.
Note to Adjudicators
The judge in this case said that “Adjudicators are acting as impartial tribunals and although involvement in other adjudications does not of itself constitute a conflict of interest, that involvement should be disclosed.” Put simply, disclosure of a contemporaneous adjudication involving the same parties is not only ethical, it may be key to providing an ultimately binding decision.