Ritchie Brothers (Pwc) Ltd -v- David Philp (Commercials) Limited
Case reference:
[2005] ScotCS CSIH_32
Thursday, 24 March 2005
Key terms: Jurisdiction - Failure to reach a decision within the time limit - The Scheme (Scotland) paragraphs 1, 7 and 19 - applicability of arbitration law - Section 108(5).
This was a reclaiming motion from a decision of Lord Eassie of 14 April 2004. The only issue for the appeal was whether the adjudicator’s jurisdiction expired on 16 October 2003 because the adjudicator had failed to reach his decision by that date, or whether his jurisdiction continued by virtue of subsequent consent to an extension of time.
The Court considered it was not appropriate to refer to principles of arbitration, but instead “to go straight to the Scheme and construe it.” The pursuers argued that regardless of the time limit for the giving of an adjudicator’s decision, the adjudicator’s jurisdiction continued and was only brought to an end if one of the parties served a fresh notice of adjudication. The majority (Clerk, LJ, Nimmo Smith LJ) held that language in paragraph 19(i) and section 108(5) of the Act was clear in that it provided that the adjudicator “shall reach his decision” within 28 days. That language suggested that the time limit was mandatory. The adjudicator’s jurisdiction therefore ceased on the expiry of that time period.
The court considered that Judge Seymour’s consideration in Simon Construction Ltd v Aardvark Developments Ltd [2004] BLR 117 of paragraph 19 of the Scheme (that the adjudicator’s jurisdiction continued until a fresh notice had been served) could only be arrived by way of a “contrived interpretation” (para 16). An adjudicator was therefore obliged to issue his decision within the time limit and had no power to issue it after the expiry of that time limit.
However, Abernethy L in the minority, considered that there was some latitude in the 28 day period (para 37) and it would seriously undermine the aim of providing a speedy resolution of disputes if the parties had to recommence the adjudication procedure (para 38).
The majority opinion was that paragraph 19(1)(a) of the Scheme was mandatory. Adjudicators in Scotland must issue their decisions within the time period.
The Court considered it was not appropriate to refer to principles of arbitration, but instead “to go straight to the Scheme and construe it.” The pursuers argued that regardless of the time limit for the giving of an adjudicator’s decision, the adjudicator’s jurisdiction continued and was only brought to an end if one of the parties served a fresh notice of adjudication. The majority (Clerk, LJ, Nimmo Smith LJ) held that language in paragraph 19(i) and section 108(5) of the Act was clear in that it provided that the adjudicator “shall reach his decision” within 28 days. That language suggested that the time limit was mandatory. The adjudicator’s jurisdiction therefore ceased on the expiry of that time period.
The court considered that Judge Seymour’s consideration in Simon Construction Ltd v Aardvark Developments Ltd [2004] BLR 117 of paragraph 19 of the Scheme (that the adjudicator’s jurisdiction continued until a fresh notice had been served) could only be arrived by way of a “contrived interpretation” (para 16). An adjudicator was therefore obliged to issue his decision within the time limit and had no power to issue it after the expiry of that time limit.
However, Abernethy L in the minority, considered that there was some latitude in the 28 day period (para 37) and it would seriously undermine the aim of providing a speedy resolution of disputes if the parties had to recommence the adjudication procedure (para 38).
The majority opinion was that paragraph 19(1)(a) of the Scheme was mandatory. Adjudicators in Scotland must issue their decisions within the time period.