Sudlows Ltd v Global Switch Estates 1

[2022] EWHC 3319 (TCC)

Sudlows sought summary enforcement of an adjudicator’s decision that Global should pay a total of £1 million plus VAT. This was the sixth adjudication between these parties. Global said that the adjudicator had acted in breach of natural justice by taking “too narrow a view of” their jurisdiction by holding that they were bound by certain findings made by a different adjudicator in Adjudication 5. Global also sought enforcement of alternative findings made in Adjudication 6, the effect of which would mean Sudlows had to make payment of some £200k plus VAT, interest and fees.

In Adjudication 5, the adjudicator extended the completion date for the Section 2 works to 4 January 2021 and said that Global Switch was not entitled to withhold or deduct LADs. The Relevant Events leading to this EOT were defective ducting, Global being responsible for any delays by taking the new cable out of Sudlows’ scope of work and Sudlows being entitled to refuse to terminate, and energise the new cables. Following Adjudication 5,  Global Switch omitted the energisation from Sudlows’ scope of work and certified practical completion as being achieved on 7 June 2021. Sudlows then sought a final EOT (and related costs) from 19 January 2021 to 7 June 2021.

The Adjudicator asked the parties to confirm if they should consider alternative positions in connection with the extent to which they were bound by Decision 5. Sudlows accepted the suggestion saying: “For the avoidance of any doubt, we confirm that Sudlows does not submit to your jurisdiction to open up and re-decide what, in Sudlows’ submissions, has already been decided” in Adjudication 5.

The main issue for the Judge was whether the adjudicator was bound by the decision in Adjudication 5 in the sense that they were bound to grant the further 133 days EOT (and with it, the prolongation and other costs) which would flow if the Relevant Events found in Adjudication 5  continued to apply. If the adjudicator was so bound, they obviously could not take account of the new evidence or, indeed, assess the matter differently. Whether a dispute is substantially the same is a question of fact and degree. In Quietfield Ltd v Vascroft Construction Ltd ([2006] EWCA Civ 1737), Dyson LJ said:

“If the contractor identifies the same Relevant Event in successive applications for extensions of time, but gives different particulars of its expected effects, the differences may or may not be sufficient to lead to the conclusion that the two disputes are not substantially the same. All the more so if the particulars of expected effects are the same, but the evidence by which the contractor seeks to prove them is different.

Where the only difference between disputes arising from the rejection of two successive applications for an extension of time is that the later application makes good shortcomings of the earlier application, an adjudicator will usually have little difficulty in deciding that the two disputes are substantially the same.”

In Quietfield, the basis for the EOT claim in the first adjudication was contained in two letters, while in the later adjudication, the claim for the same EOT, this time submitted as a defence to the liquidated damages claim, was much larger. That was sufficient to differentiate the two adjudications. Here, the difference in materials concerned not those which supported the underlying claim but rather those ranged against it. But that made no difference in terms of forming part of the dispute. Those materials consisted of the fact and result of the successful testing of the new cables in the existing ductwork and two reports. The Judge noted that their effect was quite dramatic because it caused the adjudicator to conclude that (a) the original ductwork and cables were fit for purpose, and (b) the refusal on the part of Sudlows to facilitate the termination, connection and subsequent energisation was unreasonable. The fact that Sudlows contended that the new materials took the matter no further was irrelevant. They clearly did in the eyes of the adjudicator and that view could not be challenged.

The Judge held that, in those circumstances, it could not be said that Global was simply repeating its previous argument without more. It was relying on the testing and reports, being an event and evidence that simply did not previously exist. That, in turn, was a function of the fact that Adjudication 5 did not, and could not, deal with the entirety of the relevant contractual period since it had not yet expired. Moreover, this was not a case where a contractor claimant might be said to seek a further adjudication artificially, in order to re-run an argument it had previously lost. It is about a respondent employer putting forward a defence to a new adjudication claim relating to a different time period, so there was no artificiality on its part.

The fact that, in both adjudications, the existence or otherwise of those Relevant Events was an issue, was plainly insufficient to mean that, in both adjudications, the dispute was the same or substantially so. The Judge said this was because: 

“(a) they relate to underlying EOT’s for different periods of time, (b) the dispute in relation to the new EOT sought involved new relevant materials and the event of testing which were not, and could not, have been part of the dispute leading to the prior adjudication, and (c) this particular issue formed only one part of a much wider dispute between the parties as to the true value of the contract works as a whole, engendered by Sudlows Interim Application for Payment Number 46; the latter was in fact its final payment claim, on the basis that practical completion had now taken place. Indeed, in my judgment, elements (a) and (b) alone would suffice.”

The jurisdictional question involved an analysis of what both disputes were about, and whether they were the same or substantially so. Here, the decision in Adjudication 5 was for an EOT for a prior period. Further, the new material was significant. It was more than argument - it was new evidence. 

Therefore, Adjudication 6 could not be enforced. This left the alternative finding, which was just that - a finding to be substituted for the primary one if the latter was not enforceable. The alternative findings were ones which were just as detailed - in every respect - as the primary findings - and they were covered by the parties in their extensive submissions. For the purposes of enforcement, the adjudicator plainly had jurisdiction to formulate the award on an alternative basis. 

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