Fair Procedures and Adjudication

A recent High Court ruling offers valuable insight into adjudicators' responsibilities under the Construction Contracts Act 2013. It emphasises the need for parties to present strong evidence and clarifies when courts might refuse to enforce adjudication decisions due to clear procedural unfairness. Our Construction, Infrastructure & Utilities team explores the decision.

The High Court has provided useful guidance on the type of conduct on the part of an adjudicator which might justify the refusal of leave to enforce a decision. Delivering the judgment in DNCF Ltd v Genus Homes Ltd[1], Mr Justice Simons emphasised the enhanced status of an adjudicator’s decision in Ireland. In addition, he highlighted the reluctance of the courts to engage in an examination of the merits of these decisions.

These proceedings involved a dispute over a supposed overpayment by the respondent employer to the applicant contractor. The construction works in question had reached substantial completion in December 2022 and the adjudication commenced. The dispute was referred to adjudication as required by the Construction Contracts Act 2013.

The adjudicator requested a copy of the payment certificate evidencing the overpayment. The employer submitted a certificate which provided no breakdown of costs or sums contributing to the total figure. In the absence of these breakdowns, the adjudicator concluded that the employer had not established an entitlement to repayment. In resisting enforcement, the employer argued that the adjudicator had acted in breach of fair procedures. The employer claimed this occurred because the adjudicator failed to request a detailed breakdown of the calculation of the figures during the adjudication proceedings. In short, the employer’s central argument was that adjudicator should have requested further and better particulars as to the employer’s defence.

In his judgment, Mr Justice Simons began by examining the role of the adjudicator in ensuring fair procedures for parties to an adjudication. He stressed that an adjudicator is under no obligation to “[cajole] the parties to elaborate or improve upon their cases”, concluding that:

“The adjudicator was entitled, consistent with fair procedures, to reach a decision on the basis of the materials put before him by the parties. The adjudicator was not obliged to enter into a dialogue with the employer nor to invite the employer to shore up its defence by adducing further evidence.”

The judgment then explained the limited circumstances in which the Court may exercise its discretion in refusing to enforce an adjudicator’s decision:

“The High Court will only refuse leave to enforce an adjudicator’s decision on the grounds of procedural unfairness where there has been a blatant or obvious breach such that it would be unjust to enforce the immediate payment obligation.”

The Court held that was a failure on the part of the adjudicator to request further and better particulars. The alleged did not constitute a blatant or obvious breach to justify the Court’s interference.

On a separate point, Mr Justice Simon’s commented on the significance of relevant case law from England. He highlighted that the legislative regime in Ireland provides an adjudicator’s decision with “an enhanced status” as compared to the UK legislation. Accordingly, case law from those jurisdictions should be approached with a “degree of caution” due to the significant differences between the legislative schemes in each jurisdiction.

Conclusion

This case should act as a cautionary tale to parties when making submissions to an adjudicator under the Construction Contracts Act 2013. The judgment makes clear that the onus lies on the individual parties to put forward evidence as they consider necessary to substantiate their case. While the adjudicator has discretion to seek further information, they are under no obligation to do so. Finally, it will be for the party resisting enforcement of a decision to a demonstrate that there has been an obvious or blatant breach of fair procedures on the part of the adjudicator. Only where such evidence has been proved to its satisfaction will the Court be prepared to intervene.

For more information, contact a member of our Construction, Infrastructure & Utilities team.

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[1] [2023] IEHC 490

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