To what extent can a party to an adjudication object to the other side running the same or similar points to those previously decided?
When a construction project goes wrong, parties can often find themselves embroiled in a series of costly adjudications. It can be a source of considerable frustration to a party if the arguments that its opponent seeks to run in a later adjudication appear to be the same or similar arguments that have previously been advanced and rejected in previous adjudications.
There is an obvious cost associated with a party's legal team meeting the similar arguments again, and there is also a risk that the same issue might be decided differently by subsequent adjudicators - thereby leading to uncertainty.
It is for this reason that the courts will refuse to enforce an adjudicator's decision if they consider that what has been decided is substantially the same as a dispute that has already been the subject of an adjudication. However, this has not prevented parties seeking to test the boundaries of this established principle, and this issue has come before the courts again recently in the case of Eurocom Ltd v Siemens Plc.
Eurocom were engaged by Siemens to install communications systems at Charring Cross and Embankment tube stations. The parties became embroiled in a dispute regarding delays, disruption, prolongation and variations to the work scope, and Siemens terminated Eurocom's employment in August 2012.
Shortly after, Eurocom commenced adjudication proceedings against Siemens seeking payment of around £1.4m. However, the appointed adjudicator decided that in fact there was a net payment of around £35,000 due from Eurocom to Siemens.
Over a year later in October 2013, Eurocom commenced another set of adjudication proceedings against Siemens and a different adjudicator was appointed. In this adjudication, Eurocom sought payment of around £2.2m from Siemens. This time, the new adjudicator decided that Siemens should pay Eurocom around £1.6m.
Siemens refused to pay this sum to Eurocom on a number of grounds. One of Siemens' objections was that most of the claims that formed the subject of the second adjudication - which was decided substantially in Eurocoms favour - were merely 're-packaged' versions of claims that had already been decided in Siemens' favour in the first adjudication.
Eurocom disputed this interpretation, and argued that the subject of the first adjudication had been an 'interim account' whereas the subject of the second adjudication had been a 'final account'.
The issue came before the Honourable Mr Justice Ramsey in the Technology and Construction Court, who agreed with Siemens. He decided, amongst other matters, that:
'.a party who has sought and obtained an adjudication decision dealing with the value of all variations cannot then seek to have another adjudicator determine claims for the same variations by way of a 'second bite of the cherry'.'
This judgment re-confirms the position that a party cannot re-adjudicate the same claims if it is dissatisfied with the decision in the first instance, and that re-packaging these claims or purporting to present them on a different basis will not enable a party to 'side-step' this principle.
The position is clear - if a party is dissatisfied with an adjudicator's decision, it is at liberty to commence proceedings in the courts or through arbitration. It cannot ask an adjudicator to re-decide disputes that are substantially the same as disputes that have already been decided.
There are perfectly good policy reasons why this should be the case: to promote certainty; and to prevent a respondent from repeatedly bearing irrecoverable legal costs in defending repeat adjudications on the same issues while a referring party seeks a decision that it likes.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.