Christiani & Nielsen Limited v The Lowry Centre Development Company Limited

Thursday, 29 June 2000

Key terms: 
Enforcement - Jurisdiction - Contract entered into before 1 May 1998 - Estoppel - Rectification - ICE Conditions

The Adjudicator gave a decision that The Lowry Centre should pay Christiani £188,064.36. This related to liquidated damages that The Lowry Centre had deducted from sums certified to Christiani.

At enforcement, The Lowry Centre argued that the Adjudicator did not have jurisdiction to decide his own jurisdiction, and therefore the decision should not be enforced. Further, the contract was entered into before 1 May 1998 and so the HGCRA did not apply. Even if it did, then Christiani was estopped from proceeding with the adjudication as they had waived their entitlement to rely upon the Act. Finally, they agreed that the claim involved rectification of the deed, which went beyond the jurisdiction of the Adjudicator.

HHJ Thornton QC held that an adjudicator could not decide his own jurisdiction, because the Act only gave the adjudicator jurisdiction to decide disputes arising under the contract. However, an adjudicator could ignore the challenge and proceed, allowing the court to consider the question at the time of enforcement. Alternatively, an adjudicator could investigate the question of his jurisdiction and reach his own “conclusion”. He would then need to either resign, or proceed with the adjudication depending upon his conclusion. Regardless of the conclusion, his decision will be non-binding in respect of his jurisdiction, as that was solely a matter for the court.

A letter of intent dated 11 August 1997 incorporating the 5th Edition of the ICE Conditions provided the initial agreement for work to commence. A formal contract was signed and dated 1 December 1998. The formal contract superseded the earlier letter of intent. The contract contained the words:
“Notwithstanding the date of execution of his Agreement, the Agreement shall take effect from 11 August 1997.”

This was an attempt to avoid the operation of the HGCRA. The “notwithstanding” provision was ineffective, as in reality the contract was formed on 1 December 1998. By that time, the HGCRA was in force, and therefore Section 108 provided either party with a right to adjudicate disputes arising under the contract of 1 December 1998.

As the adjudicator needed to consider the issue of rectification in order to decide the dispute. The issue was “necessarily connected” with the dispute, such that the adjudicator had jurisdiction to consider it.

The terms of the HGCRA were mandatory and could not be contracted out. As a result, Christiani had a right to refer the dispute to adjudication, and the decision of an adjudicator was enforceable.

Key contact

Tel: +44 (0)20 7421 1986
Tel: +44 (0)20 7421 1986