Impresa Castelli SpA -v- Cola Holdings Limited
Case reference:
[2002] EWHC 1363 (TCC)
Thursday, 2 May 2002
Key terms: JCT 81 WCD - Clause 39 - "Adjudication Matter" - jurisdiction of the courts to consider claim not previously referred to adjudication
The judgement in this case related to four preliminary issues arising from an action brought by Impresa who was the main contractor in respect of a large hotel at Great Queen Street, London, WC2. The main contract was in the form of the JCT with Contractor's Design 1981 Edition, which was dated 24th June 1997. The contract sum was £10.35 million. The first three issues related to possession of the site, liquidated damages and a claim for loss and expense. The fourth issue related specifically to whether the court had substantive jurisdiction to consider the employer's counterclaim for damage in respect of alleged defective workmanship and materials. Clause 39 of the contract required certain disputes to be referred to adjudication, and that the decision was final and binding unless referred to arbitration within 14 days of the adjudicator's decision.
Impresa argued that disputes about defects should have been referred to adjudication first. They then argued that the disputes in respect of defects had not been referred to adjudication, and so those disputes could not now be referred to arbitration and/or litigation (the parties had waived their right to arbitration) as an adjudicator's decision was a condition precedent to arbitration or litigation.
HHJ Thornton QC held that the matters of adjudication complained of were probably not "Adjudication Matters" as defined, because disputes about defects were unlikely to come to light until after practical completion. It would therefore not be possible to identify and refer such matters to adjudication before practical completion in accordance with the relevant part of clause 39. Second, if those matters were in fact "Adjudication Matters", then they were validly referred and a decision was given in respect of them. Further, after the dispute had arisen the parties, in an exchange of letters, both agreed to waive the arbitration clause in favour of referring their disputes to the TCC. Therefore, in any event the parties had agreed to give the courts jurisdiction to deal with this particular dispute.
Impresa argued that disputes about defects should have been referred to adjudication first. They then argued that the disputes in respect of defects had not been referred to adjudication, and so those disputes could not now be referred to arbitration and/or litigation (the parties had waived their right to arbitration) as an adjudicator's decision was a condition precedent to arbitration or litigation.
HHJ Thornton QC held that the matters of adjudication complained of were probably not "Adjudication Matters" as defined, because disputes about defects were unlikely to come to light until after practical completion. It would therefore not be possible to identify and refer such matters to adjudication before practical completion in accordance with the relevant part of clause 39. Second, if those matters were in fact "Adjudication Matters", then they were validly referred and a decision was given in respect of them. Further, after the dispute had arisen the parties, in an exchange of letters, both agreed to waive the arbitration clause in favour of referring their disputes to the TCC. Therefore, in any event the parties had agreed to give the courts jurisdiction to deal with this particular dispute.