Midland Expressway Limited & Secretary of State for Transport v Carillion Construction Limited, Alfred MacAlpine Construction Limited, Balfour Beatty Group Limited & Amec Capital Projects Limited
Case reference:
[2006] EWHC 1505 (TCC)
Tuesday, 13 June 2006
Key terms: Challenge to Decision of Adjudicator - Time Bar to action - No Dispute capable of arising out of Claim for Indirect costs - Withdrawing Claim for Indirect Costs
The Secretary of State for Transport granted Midland the right to design, construct and operate the M6 toll road. Midland and the joint venture comprising Carillion, Alfred McAlpine, Balfour Beatty and AMEC ('CAMBBA') entered into a contract for the design and construction. Work commenced in late 2000 and completion was achieved three years later.
There were many contractual issues between the parties, which were the subject of several separate adjudications, including one which examined the entitlement of CAMBBA to indirect costs. The adjudicator determined that there was currently no dispute between the parties as to CAMBBA's indirect costs. The Adjudicator said that Midland did not intend to put forward any independent claim as to the proper evaluation of the indirect costs, as it was Midland's position that this was set out in the total costs claim. As the total cost claims was no longer advanced by CAMBBA, it had not quantified any claims as to which it may be entitled, and as a result the adjudicator could not formulate a decision on any claim. The adjudicator said that the only basis he could decide was whether the claim, in the original form (the total cost claim) could have succeeded in relation to the indirect costs consequences, and this appeared to be a non-dispute as the basis set out in the total cost claim is no longer pursued. The adjudicator stated that in the circumstances he did not see why the claim could not be abandoned or withdrawn in whole. The parties served further evidence and the adjudicator proceeded in relation to the matter of direct costs. The decision as to indirect costs was appealed.
On appeal the Court considered whether the action was time-barred? Was the Adjudicator correct to conclude that there was no dispute capable of being adjudicated arising out of CAMBBA's claim for indirect costs? and Were CAMBBA entitled to withdraw a claim which they had made for indirect costs?
The Court held that the action was not time-barred. The time limit of '60 days after receipt of the determination of the adjudicator' meant the final decision of the adjudicator by which he completes the discharge of his functions. It does not refer to any earlier ruling or decision which it made along the way.
In relation to the issue as to whether there was a dispute, the Court held that the parties were all aware that CAMBBA had a substantial claim for indirect costs. However, at no stage was there a quantified claim for indirect costs that was capable of being disputed. There existed a dispute of principle, as to whether CAMBBA was entitled to recover the indirect costs, but the parties had not asked that this question of principle be decided in isolation. Therefore there was not a dispute to be adjudicated.
Finally, the Court looked at whether a party could discontinue its claim, or certain heads of claim in Adjudication. It was acknowledged that this could be done in litigation. In the HGCRA there is no provision about the entitlement of a party to withdraw or not withdraw a claim which has been advanced in adjudication. The Court concluded that it was not possible to conclude or read into the HGCRA that a party could not withdraw a disputed claim. This decision was reached on the following basis; there was nothing in the Scheme or Act to suggest a restriction, adjudication is an informal process, if there were a restriction it would force parties to continue with bad claims, which would lead to time wastage and costs.
The Court dismissed the appeal and upheld the decision of the adjudicator.
There were many contractual issues between the parties, which were the subject of several separate adjudications, including one which examined the entitlement of CAMBBA to indirect costs. The adjudicator determined that there was currently no dispute between the parties as to CAMBBA's indirect costs. The Adjudicator said that Midland did not intend to put forward any independent claim as to the proper evaluation of the indirect costs, as it was Midland's position that this was set out in the total costs claim. As the total cost claims was no longer advanced by CAMBBA, it had not quantified any claims as to which it may be entitled, and as a result the adjudicator could not formulate a decision on any claim. The adjudicator said that the only basis he could decide was whether the claim, in the original form (the total cost claim) could have succeeded in relation to the indirect costs consequences, and this appeared to be a non-dispute as the basis set out in the total cost claim is no longer pursued. The adjudicator stated that in the circumstances he did not see why the claim could not be abandoned or withdrawn in whole. The parties served further evidence and the adjudicator proceeded in relation to the matter of direct costs. The decision as to indirect costs was appealed.
On appeal the Court considered whether the action was time-barred? Was the Adjudicator correct to conclude that there was no dispute capable of being adjudicated arising out of CAMBBA's claim for indirect costs? and Were CAMBBA entitled to withdraw a claim which they had made for indirect costs?
The Court held that the action was not time-barred. The time limit of '60 days after receipt of the determination of the adjudicator' meant the final decision of the adjudicator by which he completes the discharge of his functions. It does not refer to any earlier ruling or decision which it made along the way.
In relation to the issue as to whether there was a dispute, the Court held that the parties were all aware that CAMBBA had a substantial claim for indirect costs. However, at no stage was there a quantified claim for indirect costs that was capable of being disputed. There existed a dispute of principle, as to whether CAMBBA was entitled to recover the indirect costs, but the parties had not asked that this question of principle be decided in isolation. Therefore there was not a dispute to be adjudicated.
Finally, the Court looked at whether a party could discontinue its claim, or certain heads of claim in Adjudication. It was acknowledged that this could be done in litigation. In the HGCRA there is no provision about the entitlement of a party to withdraw or not withdraw a claim which has been advanced in adjudication. The Court concluded that it was not possible to conclude or read into the HGCRA that a party could not withdraw a disputed claim. This decision was reached on the following basis; there was nothing in the Scheme or Act to suggest a restriction, adjudication is an informal process, if there were a restriction it would force parties to continue with bad claims, which would lead to time wastage and costs.
The Court dismissed the appeal and upheld the decision of the adjudicator.