Lanes Group Plc v Galliford Try Infrastructure Ltd

This case raises an interesting point in the law relating to adjudication as to what happens legally when a party who institutes a reference to adjudication does not want, for good or bad reason, to go ahead with the nominated adjudicator. If it abandons that reference, can it go ahead with another reference for the same dispute or not?

Galliford Try Infrastructure Limited (“GTI”) was a main contractor engaged to carry out certain refurbishment works at the Inverness Train Maintenance Depot. GTI engaged Lanes Group PLC ("Lanes") as a sub-contractor for certain roofing and glazing works. Disputes arose between them and the relationship broke down in about April 2009 with each party blaming the other for the termination or repudiation of the Sub-Contract. GTI used other resources to complete the project in 2010. Lanes pursued an adjudication against GTI in December 2009 into early 2010.

In November 2010, Lanes issued proceedings in this Court against GTI in relation to the outstanding value of its work at the termination and damages for wrongful termination. Those proceedings have been stayed to arbitration by agreement, and, with the consent of the Lord Chief Justice, Mr Justice Ramsey has been appointed as the arbitrator.

On 23 December 2010, GTI sent to Lanes a claim in relation to delay and the termination. It seems that Lanes did not receive all of the attached documentation until early January 2011.

It is common ground that the Sub-Contract incorporated the CECA Form of Sub Contract (July 1998, February 2008 Amendment). Clause 18B of the conditions provides as follows:

“(1)(a) …the Contractor and the Sub-Contractor each has the right to refer any matter in dispute arising under or in connection with the Sub-Contract or the carrying out of the Sub-Contract Works to adjudication and either party may at any time give notice in writing (hereinafter called the Notice of Adjudication) to the other of his intention to do so. The adjudication shall be conducted under "The Institution of Civil Engineers’ Adjudication Procedure (1997)"…

(b)

Unless the adjudicator has already been appointed he is to be appointed by a timetable with the object of securing his appointment and referral of the dispute to him within 7 days of such notice.”

The remainder of Clause 18B broadly deals with what is to happen after the appointment of the adjudicator, albeit it is made clear that the adjudicator has to act "impartially".

The Adjudication Procedure referred to, issued by the ICE, contains the following material paragraphs:

“1.2

The object of adjudication is to reach a fair, rapid and inexpensive determination of a dispute arising under the Contract and this Procedure shall be interpreted accordingly.

1.3

The Adjudicator shall be a named individual and shall act impartially…

2.1

Any Party may give notice at any time of its intention to refer a dispute arising under the Contract to adjudication by giving a written Notice of Adjudication to the other Party. The Notice of Adjudication shall include:

(a)

the details and date of the Contract between the Parties;

(b)

the issues which the Adjudicator is being asked to decide;

(c)

details of the nature and extent of the redress sought.

3.3

[If a specific adjudicator is not agreed upon]…then either Party may within a further three days request the person or body named in the Contract or if none is so named The Institution of Civil Engineers to appoint the Adjudicator. Such request shall be in writing on the appropriate form of application for the appointment of an adjudicator and accompanied by a copy of the Notice of Adjudication and the appropriate fee.

3.4

The Adjudicator shall be appointed on the terms and conditions set out in the attached Adjudicator’s Agreement and Schedule and shall be entitled to be paid a reasonable fee together with his expenses. The Parties shall sign the agreement within 7 days of being requested to do so.

3.5

If for any reason whatsoever the Adjudicator is unable to act, either Party may require the appointment of a replacement adjudicator in accordance with the procedure in paragraph 3.3.

4.1

The referring Party shall within two days of appointment…under paragraph 3.3 send a full statement of his case which should include:

(a)

a copy of the Notice of Adjudication;

(b)

a copy of any adjudication provision in the Contract, and

(c)

the information upon which he relies, including supporting documents.

4.2

The date of referral of the dispute to adjudication shall be the date upon which the Adjudicator receives the documents referred to in paragraph 4.1. The Adjudicator shall notify the Parties forthwith of that date.

5.1

The Adjudicator shall reach his decision within 28 days of referral, or such longer period as is agreed by the Parties after the dispute has been referred. The period of 28 days may be extended by up to 14 days with the consent of the referring Party…”

Following the appointment of Mr Justice Ramsey as arbitrator, GTI’s solicitors served on Lanes a Notice of Adjudication. It sought a declaration that it had lawfully determined Lanes’ employment under the Sub-Contract, or alternatively that Lanes had repudiated the Sub-Contract and claimed over £2.7m. By letter dated 9 March 2011, the solicitors dispatched an application to the ICE for the appointment of an adjudicator. They suggested that a Mark Dixon be appointed because he had previously acted as adjudicator. They sent to Lanes’ solicitors on the same day a copy of that application.

That day was a busy one because Lanes’ claim consultants, Bunton, wrote to GTI’s solicitors effectively stating that any adjudicator appointed would have no jurisdiction; they also wrote to the ICE saying that it would be inappropriate for Mr Dixon to be appointed:

“My clients object to this gentleman. Mr Dixon acted as Adjudicator in a previous Adjudication between the parties. My clients consider that the matter was not handled to my clients’ satisfaction and further…if he was appointed, in this current matter, that Mr Dixon would be biased against my clients."

GTI’s solicitors protested to the ICE about this "extraordinary and serious allegation of bias".

On 10 March 2011, the ICE appointed Mr Howard Klein FCIArb, FIOB, who also is a Chartered Quantity Surveyor. He wrote to the parties on 10 March 2011 confirming that he was willing to act and that he had accepted his appointment. Lanes by their consultants continued to reserve its position on jurisdiction and wrote to Mr Klein to that effect.

On 11 March 2011, GTI’s solicitors wrote to the ICE in the following terms:

“…You kindly nominated Mr Klein of Warrington as adjudicator. However, our firm view is that Mr Klein is not an appropriate adjudicator in this matter, as we shall explain.

Our Mr Fraser conducted a series of adjudications about one year ago, in which Mr Klein acted for the other party. The series was relatively acrimonious, and involved suggestions of forgery and profoundly contradicting credibility. At one stage, Mr Klein misunderstood our submission that a witness statement may have been signed by someone other than its author. This episode triggered his attached fax (redacted to anonymise the parties). We had not, in fact, suggested that Mr Klein had done so, and Mr Klein had misunderstood our submission.

With the greatest respect to Mr Klein, whose professional probity we do not question whatsoever, this history may make it difficult to him to be seen to be impartial in this new adjudication. Accordingly, we do not propose to proceed with the adjudication notice in which you have appointed Mr Klein. We have served a fresh adjudication notice, which is attached. We also attach a further nomination application. We invite you to appoint an adjudicator other than Mr Klein (or, for that matter, Mr Dixon, whom you will recall was opposed by Lanes)…”

This was copied to Lanes’ consultants, Bunton.

Bunton wrote to the ICE on 14 March 2011 saying in effect that they could not nominate another adjudicator and that Mr Klein was not biased. In fact, the ICE was not prepared at that stage to appoint another adjudicator. On 15 March 2011, Bunton wrote to GTI’s solicitors:

“We contend that the decision by [GTI] not to serve its statement of case under paragraph 4.1 of the ICE Adjudication Procedure is a repudiatory breach of the adjudication agreement set out in clause 18B of the Sub-contract between GTI and Lanes. Which Lanes hereby accepts.

If you were, or are, of the view that GTI have valid legal grounds to dispute Mr Klein’s appointment as the Adjudicator, then the correct course absent Lanes’ agreement which you do not have, was to invite him to resign on whatever valid legal grounds you maintain that he should do so, failing which you should apply to the Court that his removal.

You have not done so. If and to the extent that our argument on repudiatory breach may be incorrect, therefore in the alternative, we have invited Mr Klein to dismiss your claims as set out in the Notice of Adjudication. For the avoidance of any doubt, Lanes will resist any application by GTR to serve fresh adjudication proceedings on the claims which are the subject of the current Notice of Adjudication."

Mr Klein’s position is summarised in his letter to the parties dated 16 March 2011:

“I confirm that unless I resign for want of jurisdiction or a Court removes me then I am the duly nominated Adjudicator to adjudicate upon the dispute.

I also point out that should Galliford serve the Referral Notice and documentation later than stipulated, I will remain the Adjudicator unless Lanes raise the jurisdictional challenge that the Referral has been served late and, therefore, I cannot have jurisdiction…”

He wrote on the same day to the ICE, copied to the parties, explaining the background to the adjudications involving him and Mr Fraser of GTI’s solicitors. I will return to this later. GTI’s solicitors also wrote on 16 March to the ICE saying that it should not involve itself.

On 16 March also, GTI’s solicitors wrote back to Bunton stating that Mr Klein effectively no longer had jurisdiction because there was no referral and there was nothing for him to do. They asserted that their clients were entitled to serve a fresh adjudication notice and would do so, arguing that there was no separate contract to adjudicate and it cannot therefore have been breached.

On 21 March 2011, GTI’s solicitors served a fresh Notice of Adjudication and wrote to the ICE seeking a fresh nomination. On 24 March 2011, the ICE appointed Mr Daniel Atkinson. Around this time much repetitive correspondence passed between Bunton, GTI’s solicitors, Mr Klein and the ICE in which each broadly reiterated his or their positions. Mr Klein has not yet resigned as such although he has taken no active steps to seek to resolve or adjudicate upon the issues between the parties. Mr Atkinson has indicated that he is ready to proceed with the adjudication to which he has been appointed adjudicator.

On 1 April 2011, Lanes issued Part 8 proceedings seeking an injunction to restrain GTI from "continuing or making further applications to adjudicate a particular dispute". Lanes contended that “the Defendant’s conduct [in seeking to refer the same dispute to adjudication three times] is unfair, unreasonable and oppressive and amounts to a breach of the adjudication agreement and/or is an abuse of process which ought properly to be restrained by the Court." This Claim was accompanied by an application for an interim injunction seeking to restrain GTI from pursuing the adjudication of the dispute or from making further applications to adjudicate the dispute which had been the subject of its applications and Notices of Adjudication dated 8, 11 and 21 March 2011. This was supported by witness statements from Messrs Barton (Lanes’ Solicitor) and Mr Browne “also of Barton Legal/Lanes’ solicitors” (who exhibited the Sub-Contract). Given that some urgency was indicated, I gave directions on 4 April 2011 with a view to there being an oral hearing on 7 April 2011. GTI submitted one witness statement from Mr Fraser on 6 April 2011, which addressed numerous issues initially raised by Mr Barton but also went into some detail as to why there might be apparent bias on the part of Mr Klein.

The hearing proved partially abortive because it had to be adjourned in relation to the issue with which this judgement is concerned to enable Lanes’ solicitors by way of an agreed letter to invite Mr Klein to comment on the material parts of Mr Fraser’s statement which addressed the issue of possible bias. I however was able to address a subsidiary issue which related to whether or not in effect the Referral had in practice been served within time such as to give Mr Atkinson jurisdiction, albeit subject to the issue with which this judgement is concerned. I decided that it had been so served.

On 12 April 2011, Mr Klein delivered his detailed letter dealing with the suggestion that there may have been possible bias. A second and lengthy further witness statement was provided by Mr Fraser on 11 April 2011 on the same topic.

Essentially, Lanes through its Counsel put its case on the basis that the adjudication agreement, like arbitration agreements, survives contractual termination or an accepted repudiation. It is said that there was a repudiatory breach of the adjudication agreement in that there was a deliberate and conscious refusal on the part of GTI to serve the Referral within the agreed time period (2 days of the appointment of the adjudicator by the ICE) such that the adjudication with Mr Klein could not proceed. It is argued that there was a repudiation of the adjudication agreement only in so far as it related to the specific dispute which was to be referred to Mr Klein (namely that dispute which was the subject of the Notice of Adjudication served on 8 March 2011). That partial repudiation was accepted, it is argued, by the Bunton letter dated 15 March 2011 (see above). I expressly raised with Lanes’ Counsel whether she wished to argue the case on any other basis, in particular on the basis that repudiatory breach was or may not be necessary or that no breach was required. She expressly on instructions made it clear that she limited her argument to an accepted repudiatory breach. She also argued that there was no apparent bias on the part of Mr Klein.

GTI’s Counsel argues that the concept of repudiatory breach has no place in the context of an adjudication agreement in circumstances where the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”) applies to the construction contract between the parties, on the basis that, even if a contractual adjudication agreement is wholly or partly unenforceable, the statutory scheme automatically replaces it. He also argues that the concept of an accepted partial repudiation which leaves the remainder of the contract in question still "up and running" is not known to English law. He says that there was apparent bias on the part of Mr Klein and that accordingly his client’s unwillingness to serve its referral was not a breach let alone a repudiatory one.

It is common ground between the parties, and properly so, that the service of the Referral within the agreed time constraints is mandatory. This approach has been followed in cases such as Hart Investments Ltd v Fidler [2006] EWHC 2857 (TCC) and Cubitt Building & Interiors Ltd v Fleetglade Ltd [2006] EWHC 3413 (TCC). Therefore, it will follow that a materially late service of the Referral will mean that the adjudicator has no jurisdiction to proceed. That said, one can detect a measure of flexibility in contractual and statutory interpretation in relation to adjudication as to what the time period for service of the Referral is and, for instance, whether service of the Referral without all the documents referred to in it can still be counted as proper service within time (see for instance PT Building Services v Rok Build [2008] EWHC 3434 (TCC).

Although ultimately it may always be a matter of interpretation of the particular contract in issue, it has been accepted in numerous cases that an arbitration clause survives termination or an accepted repudiation (see for instance Heyman v Darwins Ltd [1942] AC 356). The logic of that is that arbitration clauses typically involve the reference of any dispute between the parties to arbitration and the parties’ mutual intention is taken to be such that post-termination or post-repudiation disputes are intended to be referable to arbitration.

There would be in principle no difference in this approach to adjudication which is, after all, a form of dispute resolution and which usually involves the potential reference of any dispute between the parties to adjudication. That this approach applies even more emphatically in the area of adjudication is because most construction contracts in the UK are subject to a statutory right to adjudication under the HGCRA which entitles a party "to refer a dispute arising under the contract for adjudication" (Section 108 (1)).

One then needs to turn to a consideration as to whether an arbitration or adjudication agreement can be repudiated. It has been accepted for some considerable time that an arbitration agreement can be repudiated, that is by one party evincing an intention no longer to be bound by the arbitration agreement. Cases such as BEA Hotels NV v Bellway LLC [2007] EWHC 1363 (Comm) confirmed this. Mr Justice Cooke said in the context of that case:

“12.

The law with regard to repudiation of an arbitration agreement was not seriously in dispute. It is clear that what BEA needs to show is a repudiation of the agreement to refer the BEA/Bellway dispute to Mr Peter Leaver QC, rather than simply the clause 11 agreement to arbitrate. The claim is made that, by pursuing claims against BEA in the Israeli proceedings, Bellway evinced an intention not to be bound by the agreement to refer those claims to the LCIA arbitration.

13.

In order to show a repudiation of that agreement to refer, it was not disputed that BEA would have to show that Bellway evinced an intention no longer to be bound by that agreement and that Bellway's conduct would have to be such that a reasonable person, in BEA's shoes, would understand Bellway to be saying that it was not prepared to continue with the reference. It was common ground that it was not repudiatory merely to bring proceedings in breach of an arbitration agreement, even if the claims pursued in those proceedings were plainly ones which were subject to the arbitration agreement. It was undisputed that a breach of an arbitration agreement by bringing other proceedings was only repudiatory if it was done in circumstances that showed that the party in question no longer intended to be bound to arbitrate. It was also agreed that such an intention could not lightly be inferred and could only be inferred from conduct which was clear and unequivocal. If there was some other reason for the breaching of proceedings it would be hard to infer that the party bringing them intended to renounce its obligation to arbitrate.

14.

Thus, if the conduct of that party in all the surrounding circumstances did not reveal a clear intention not to be bound by the agreement to refer the claims in question to arbitration, it could not be said that the arbitration agreement or reference had been repudiated. If it was clear that the party intended to pursue the arbitration, again there could be no repudiation. Whilst Mr McGrath for BEA contended that, if Bellway was seeking to run the same claims against BEA in both the arbitration and in Tel Aviv 2, this would amount to repudiation, because running the claims in Tel Aviv was inconsistent with arbitrating them, it is clear that this could not amount to a renunciation or repudiation of the agreement to refer, since the intention expressed was to continue with the arbitration, albeit alongside other litigation.

15.

Whilst a number of authorities were referred to in the skeleton arguments, in the end I was referred only to the decisions of Lloyd J (as he then was) in the Mercanaut [1980] 2 Lloyds Reports 183 and the Golden Anne [1984] 2 Lloyds Reports 489 where the arbitration agreements were breached but the court concluded that the breach was not repudiatory because there was some explanation for bringing the court proceedings which in turn meant that the court could not infer an intention to repudiate.”

I see no reason in principle why a solely contractual adjudication clause in a contract between parties should not be subject to the same approach as in arbitration. However, the position is complicated when the contract in question is a “construction contract” within the meaning of the HGCRA. Sections 104 to 106 of that Act define what is included within that definition. Section 107 provides that the construction contract must be "in writing". Section 108 lays down conditions which can not be opted out of in relation to the right of the party to a construction contract to refer the dispute to adjudication:

“(1)

A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.

For this purpose “dispute” includes any difference.

(2)

The contract shall—

(a)

enable a party to give notice at any time of his intention to refer a dispute to adjudication;

(b)

provide a timetable with the object of securing the appointment of the adjudicator and referral of the dispute to him within 7 days of such notice;

(c)

require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred;

(d)

allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred;

(e)

impose a duty on the adjudicator to act impartially; and

(f)

enable the adjudicator to take the initiative in ascertaining the facts and the law.

(3)

The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.

The parties may agree to accept the decision of the adjudicator as finally determining the dispute.

(4)

The contract shall also provide that the adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith, and that any employee or agent of the adjudicator is similarly protected from liability.

(5)

If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Scheme for Construction Contracts apply.”

It is the reasoning behind Section 108 (5) which makes the concept of repudiation of an adjudication agreement within a "construction contract" difficult to comprehend because the statute requires in an unqualified way that a party to such contract “has the right” “at any time” to refer a dispute to adjudication. The party can not lose its right to adjudicate by in some way "repudiating" the adjudication agreement and the concept of repudiation does not apply to statutory rights.

Another issue was raised as to whether or not in English law there can be an accepted repudiation of only part of the arbitration or adjudication agreement (as the case may be). In my view, the concept of common law repudiation of a contract applies to the contract as a whole and one can not in some way accept the repudiation in a partial way. So, for instance, where a contractor has undertaken under its contract with the employer to construct two houses and evinces an intention no longer to be bound by the contract, the employer can either accept the repudiation or not; what the employer can not do is to say that it accepts the repudiation in relation to one house but not the other.

So far as apparent bias is concerned, relevant authorities were quoted in the case of Makers UK Ltd v London Borough of Camden [2008] EWHC 1836 (TCC):

“30.

The Court of Appeal has considered challenges on the grounds of bias in AMEC Capital Projects Ltd v Whitefriars City Estates Ltd. Lord Justice Dyson said at Paragraphs 22 and 37:

"It is easy enough to make challenges of breach of natural justice against an adjudicator. The purpose of the Scheme of the 1996 Act is now well known. It is to provide a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending final determination of disputes by arbitration, litigation or agreement. The intention of Parliament to achieve this purpose will be undermined if allegations of breach of natural justice are not examined critically when they are raised by parties who are seeking to avoid complying with adjudicators' decisions. It is only where the defendant has advanced a properly arguable objection based on apparent bias that he should be permitted to resist summary enforcement of the adjudicator's award on that ground…

The passage in the conversation which led the judge to hold that a fair-minded and informed observer might well have concluded that there was a real possibility of bias was the statement by [AMEC's solicitor] that the reason why the dispute was being referred to [the Adjudicator] was that his familiarity with the facts would save time and costs… I do not accept that this remark amounted to an invitation to [the Adjudicator] to reach the same decision as on the previous occasion, still less that it is to be inferred that there was a real possibility that [the Adjudicator] would reach the same decision by reason of that remark. I would accept that conversations between one party and the tribunal in the absence of the other party should be avoided. Communications should ordinarily be in writing with copies to all parties. But I see nothing in the circumstances of this conversation, which arose out of an innocuous telephone call to [the Adjudicator's] office, which would lead the fair-minded and informed observer to conclude that what was said would give rise to a real possibility of bias."

31.

That case involved an adjudication by an adjudicator who had been successfully challenged on the ground that he did not have jurisdiction in an earlier adjudication. Upon the application of the successful party, such application suggesting that the same adjudicator be appointed, the RIBA duly appointed him. Lord Justice Dyson confirmed that the test propounded in Porter v Magill [2002] 2 AC 357 for apparent bias applied:

"It is rightly not in dispute that the rule against bias applies to adjudicators appointed to determine disputes under the 1996 Act. It is not said on behalf of Whitefriars that Mr Biscoe was in fact biased in reaching his second decision. It is, however, submitted that his decision should be declared to be invalid on the grounds of apparent bias. The test for apparent bias is not in doubt. It is whether a fair-minded and informed observer, having considered all the circumstances which have a bearing on the suggestion that the decision-maker was biased, would conclude that there was a real possibility that he was biased: Porter v Magill…" (Paragraph 16)

Camden only puts forward apparent bias as a ground for complaint.

32.

Dyson LJ also endorsed as useful guidance given in Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451 at Paragraph 25 of the judgment in the Court of Appeal:

"It would be dangerous and futile to attempt to define or list the factors which may or may not give rise to a real danger of bias. Everything will depend on the facts, which may include the nature of the issue to be decided. We cannot, however, conceive of circumstances in which an objection could be soundly based on the religion, ethnic or national origin, gender, age class, means or sexual orientation of the judge. Nor, at any rate ordinarily, could an objection be soundly based on the judge's social or educational or service or employment background or history, nor that of any member of the judge's family; or previous political associations; or membership of social or sporting or charitable bodies; or Masonic associations; or previous judicial decisions; or extra-curricular utterances (whether in textbooks, lectures, speeches, articles, interviews, reports or responses to consultation papers); or previous receipt of instructions to act for or against any party, solicitor or advocate engaged in a case before him; or membership of the same Inn, circuit local Law Society or chambers (see K.F.T.C.I.C. v Icori Estero S.p.A. (Court of Appeal of Paris, 28 June 1991, International Arbitration Report, vol. 6, 8/91)). By contrast, a real danger of bias might well be thought to arise if there were personal friendship or animosity between the judge and any member of the public involved in the case; or if the judge were closely acquainted with any member of the public involved in the case, particularly if the credibility of that individual could be significant in the decision of the case; or if, in a case where the credibility of an individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such person's evidence with an open mind on any later occasion; or if on any question at issue in the proceedings before him the judge had expressed views, particularly in the course of the hearing, in such extreme and unbalanced terms as to throw doubt on his ability to try the issue with an objective judicial mind (see Vakauta v Kelly (1989) 167 CLR 568); or if, for any other reason, there were real ground for doubting the ability of the judge to ignore extraneous considerations, prejudices and predilections and bring an objective judgment to bear on the issues before him. The mere fact that a judge, earlier in the same case or in a previous case, had commented adversely on a party or witness, or found the evidence of a party or witness to be unreliable, would not without more found a sustainable objection. In most cases, we think, the answer, one way or the other, will be obvious. But if in any case there is real ground for doubt, that doubt should be resolved in favour of recusal. We repeat: every application must be decided on the facts and circumstances of the individual case. The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be."

There is little to add to these observations.

I necessarily deal with this case on the basis upon which it has been argued by and on behalf of Lanes, namely that there is here an accepted repudiatory breach on the part of GTI in deliberately failing to serve its Referral within two days of Mr Klein being appointed. As indicated above, but specifically in relation to the Sub-Contract between the parties, the agreement to adjudicate clearly survived its determination or accepted repudiation (as the case may be). It is common ground, however, that the Sub-Contract between the parties was a "construction contract" as defined by the HGCRA and, it follows from what I have said above, that in practice the adjudication agreement in the Sub-Contract can not be repudiated as such.

However, I do accept that there can still be a breach of the Sub-Contract adjudication agreement by either party which may sound in damages and which, in certain circumstances, could justify the intervention of the Court by way of injunction. In this case, I am satisfied that there was a breach of the adjudication agreement by GTI. The parties agreed by Clause 18B (1) that the adjudication was to be conducted under the ICE Adjudication Procedure. That necessarily involved an obligation by the parties to comply with that Procedure. The Procedure required by Paragraph 4.1 the referring party, GTI in this case, to send to the Adjudicator its Referral documentation within two days of Mr Klein’s appointment. GTI failed to serve its Referral documentation within the agreed timescale. I do not consider that it matters in this regard whether there was apparent bias on the part of the appointed adjudicator. If there was such bias, the breach would be a nominal one which would attract little if any damages because it can not be expected that the parties should go through with the adjudication if such bias exists and, indeed, the parties would often incur substantial cost by pursuing adjudication when the adjudicator is apparently biased. Additionally in this case, Lanes were challenging his jurisdiction and so it may be that any damages will be small, if non-existent. Of course, simply because one party alleges that there is apparent bias does not mean that the other party has to accept that this is the case.

However, even if the concept of repudiation could apply to the Sub-Contract Adjudication Agreement (which it does not in my judgement), Lanes’ argument fails at the second hurdle as well. Its Counsel rightly accepts that the adjudication agreement must remain alive and capable of being operated in relation to any other disputes, other than that referred to adjudication in this particular case. She has to accept and, indeed argues, therefore that somehow each reference of a dispute gives rise to its own separate or mini agreement which is capable of being repudiated. There is, with respect, no legally rational basis for this in this case. Whilst one can accept that parties may agree on an ad hoc basis to refer a particular dispute to adjudication, that is not what happened here. She again rightly accepts that there was as such no ad hoc agreement in this case. In the absence of clear wording in the Sub-Contract adjudication clause, there simply is no room to say that the overall adjudication agreement can in some way be metamorphosed down into separate agreements for each and every dispute which is referred to adjudication.

It is therefore technically unnecessary to consider whether or not there actually was repudiatory conduct on the part of GTI because the concept of repudiation simply is inapplicable and, even if it was not, there was no separable agreement to refer the specific dispute to adjudication which could be repudiated. Out of deference to the arguments and evidence put before the Court however, I will address briefly whether there was apparent bias on the part of Mr Klein and, even if there was not, whether there was a breach which evinced an intention not to be bound by the adjudication agreement:

There is at the very least a lacuna in the HGCRA and in many standard form adjudication agreements which would allow a referring party, time and again, if it did not "like" the adjudicator nominated, to withhold service of the referral documentation so that the adjudication lapses, thus enabling it to seek a nomination which it does “like”. Clearly that would involve what would be perceived by many as an abuse of the contractual and statutory process. There are some relatively minor constraints on such a party, such as the extra costs and the nomination fee usually charged by the various institutions. There is a respectable argument, albeit not deployed in this case, that one can only refer a given dispute once to adjudication, provided that there is no valid ground for challenging either the adjudicator’s impartiality or jurisdiction or that, on some valid ground or another, the decision produced by the adjudicator on the dispute is not enforceable. It would be wrong to express any concluded view on this because I have not heard detailed argument on it. However, the answer to that argument may well provide a way in which the lacuna could be unravelled. I therefore do not rule out the possibility that an argument could be deployed to the effect that the Court could by injunction restrain a party, albeit with appropriate safeguards, from pursuing the same relief for the same dispute, time and again, in adjudication.

It follows from the above that, although GTI was in breach of contract for not serving its Referral documentation in time, Lanes’ case in these proceedings fails. I should point out that there were a number of other grounds relied upon initially by Lanes, particularly adumbrated in Mr Barton’s witness statement, which were no longer pursued.