This was an appeal focusing specifically on the meaning of “dispute” pursuant to clause 66 of the ICE Conditions of Contract in the context of arbitration. Nonetheless, the Court of Appeal considered adjudication cases dealing with the issue of whether a dispute had formed.

Amec argued that the Secretary of State’s notice of arbitration was invalid. Approximately six months before the six year limitation period was about to expire defects became apparent to the viaduct that had been constructed by Amec. Twelve days before the limitation period was about to expire the Highway Agency referred a dispute (as to whether the defect was caused by the roller bearings) to the engineer in accordance with clause 66. Seven days later the engineer gave a decision stating that Amec had installed bearings that were not in accordance with the contract. The following day the Secretary of State gave notice of arbitration. These timescales were short, and AMEC had not accepted nor denied liability. Amec argued that no dispute existed, and therefore no valid engineers decision had been given and as a result there was nothing to be referred to arbitration.

The Court of Appeal held that in considering whether there was a “dispute or difference” all of the circumstances including the impending end of the limitation period needed to be considered. Meetings had taken place many months before and it was apparent that Amec did not accept responsibility for the structural deficiencies. The engineer under clause 66 must act independently and honestly, but did not need to comply with the rules of natural justice. As a result his decision was not procedurally unfair and the arbitration notice was valid.