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Posted January 17, 2024 | Published in Contracts & documentation

Carry on Dissatisfied? Notices of Dissatisfaction and the NEC

Issuing a Notice of Dissatisfaction (“NOD”) within the requisite time frame of four weeks1 is a compulsory requirement under NEC Options W1 and W2 if a party wishes to avoid being bound by an adjudicator’s decision. Clause W2.3 (11) of the NEC4 ECC provides, “The Adjudicator’s decision is final and binding if neither Party has notified the other within the times required by the contract that it is dissatisfied with a matter decided by the Adjudicator and intends to refer the matter to the tribunal”, whilst Clause W2.4 (2) adds for good measure: “The dispute may not be referred to the tribunal unless this notification is given within four weeks of being informed of the Adjudicator’s decision” [Emphasis added]. 

No further guidance is provided within the contract on what exactly a NOD should look like. Maybe as a result of this there appears to be a growing trend for NODs to become ever more elaborate as to their contents. One adjudicator recently noted that they had been sent a copy of an eight-page NOD rejecting their decision and its rationale. 

So, what are the key issues to consider in relation to NODs?

The first issue to consider is whether to serve a NOD at all. That may be obvious in some cases but not in all. For example, where one party has had a good result but has not won on every point, there is often a temptation to wait until the very last minute to see if the other side will serve a NOD first. After all if they don’t, the other side will be permanently bound by the whole decision and the matter may not progress at all. They may have completely forgotten all about the clause and its time bar or just be resigned to their position. Equally that party may leave it to the last minute in order to try and craft an argument that they can dispute the decision (or various elements of it) in front of the tribunal (be that Court or arbitration) but the other side cannot. Essentially this is an elaborate stalemate. 

As yet, there is no definitive case law on whether a party who won on most points but not all should serve a NOD to preserve its position on the issues it didn’t win, but the other side has already issued a NOD focussing in on specific issues. As such, there is potential for fun and games on what the tribunal has jurisdiction to look at all. 

Next it is time to consider the contents of your NOD carefully. Helpfully the case law to date has suggested that a NOD that “condescends” into the detail of the decision is not required. As stated in the case of Transport for Greater Manchester v Keir Construction [2021] EWHC 804 (TCC): “A valid notice would have to be clear and unambiguous so as to put the other party on notice that the decision was disputed but did not have to condescend to detail to explain or set out the grounds on which it was disputed”. On the basis of this case then, an eight-page NOD is not required. 

A similar message was conveyed in The Metropolitan Borough Council of Sefton v Allenbuild Limited [2022] EWHC 1443 (TCC). However, in that case it was also made clear that a NOD must distinguish between whether there is a challenge to the decision being made on the basis of lack of jurisdiction only and/or also challenging the underlying validity of the decision. The judge stated: “I hold that whilst a notice of dissatisfaction need not descend into the details of any substantive challenge to an adjudicator's decision, the issue of the validity of such a decision is of a fundamentally different character from its substantive merits; and a notice of dissatisfaction needs to make it clear whether a challenge is being made to the validity of an adjudicator's decision on jurisdictional grounds, instead of, or in addition to, a challenge to its substantive merits. In my judgment, the notice of dissatisfaction, issued on 7 February 2022, relating to ‘the entirety of the Adjudicator's Decision including all of the Adjudicator's conclusions, reasoning, and decisions’, on its true construction, did not make it clear that a challenge was being made to the validity of the adjudicator's decision, on jurisdictional grounds, in addition to a challenge to its substantive merits” [Emphasis added].

However, the case of Ravestein BV v Trant Engineering Limited [2023] EWHC 11 (TCC) added further to this with the Judge Kelly noting: “I do not accept the submissions of the Claimant that the correct interpretation of the judgment of O’Farrell J is that despite the clear words of the relevant clauses, it is sufficient only to make clear in the Notice of Dissatisfaction that a party does not accept the adjudicator’s decision as final and binding, so if that is clear, nothing further is required”.

The Ravestein case then could potentially keep the door open to further arguments about the level of detail a NOD does have to go into, albeit you would hope these arguments would be dealt with robustly by the TCC. What is clear is that if you are challenging on the basis of jurisdiction only and such a challenge is rejected by the TCC in enforcement proceedings, you would be bound by the substantive decision. The option to refer the matter to the tribunal (be that arbitration or court) would then be lost. As such, the safest course of action may be to resist on both substantive and jurisdictional grounds (if there are any jurisdictional issues in play).  

Finally, and hopefully most obviously, you must ensure any NOD is served within the right time frame and check that the notice is served on the correct person(s) and the correct address. If a hard copy is required then time should be allowed for it to reach its destination notwithstanding postal strikes, train strikes or inclement weather getting in the way.

  • 1. Four weeks is provided in the standard form core clauses; this may be amended.

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