Alstom Signalling Ltd -v- Jarvis Facilities Ltd
Case reference:
[2004] EWHC 1285 (TCC)
Friday, 28 May 2004
Key terms: Summary Judgment - IChemE Model Form for Process Plant, Sub Contract (Second Edition 1997) - Target Cost Summary - Payment - Pain/Gain Clause - Ambush - Fairness - Section 110(1)(b) - CPR Part 1 - Section 110(2) - Section 111 - Scheme Para 2(1) - Scheme P
Alstom Signalling Limited had been engaged as main contractor by Railtrack to design, manufacture and install plant for an extension to the Tyne and Wear Metro. Jarvis Facilities Limited were sub-contractors to Alstom for the design, supply, installation, testing and commissioning of signalling and telecommunications equipment. The form of contract was the IChemE Model Form for Process Plant, Sub-Contract, Second Edition 1997. A target cost summary applied. A dispute had arisen about the existence of and/or operation of a “pain/share” or “pain/gain” clause which was the subject of separate proceedings.
The matter was referred to adjudication and as a result Alstom complied with the decision paying Jarvis ?1,695,501.50 and interest. The decision was expressed to be provisional and it was hoped that there would be a dialogue between the parties in order to resolve the final account. Application No. 32 was then made in May 2003. Alstom asked that all documentation be sent to their Birmingham office in order to avoid delay. This was not done. Two notices of adjudication were served by Jarvis in January 2004 and Alstom cross adjudicated. The separate enforcement proceedings were consolidated.
HHJ LLoyd QC held that there was not an absolute right to have an adjudicator’s decision paid. Apart from jurisdictional challenges or the fact that a decision could be initiated by a failure to comply with the concepts of fairness, a judge when considering a summary judgment application also needed to consider the overriding objective of CPR Part 1. To consider one summary judgment application in respect of an adjudicator’s decision and then at a second summary judgment application to track back over old ground was inconsistent with the overriding objective of CPR Part 1. Further, if it were possible to resolve a point of law and determine it finally by way of summary judgment then the interests of the parties would be best served.
His Honour therefore considered how the payment provisions of the Act operated and came to the conclusion that the decision of the adjudicator should not be enforced. This was because the adjudicator was asked to decide what sum was “due”. The adjudicator decide that in the absence of a withholding notice Jarvis’ application should be paid, but HHJ LLoyd QC held that the amount “due” was the amount identified in Alstom’s certificate not the payment application of Jarvis.
The matter was referred to adjudication and as a result Alstom complied with the decision paying Jarvis ?1,695,501.50 and interest. The decision was expressed to be provisional and it was hoped that there would be a dialogue between the parties in order to resolve the final account. Application No. 32 was then made in May 2003. Alstom asked that all documentation be sent to their Birmingham office in order to avoid delay. This was not done. Two notices of adjudication were served by Jarvis in January 2004 and Alstom cross adjudicated. The separate enforcement proceedings were consolidated.
HHJ LLoyd QC held that there was not an absolute right to have an adjudicator’s decision paid. Apart from jurisdictional challenges or the fact that a decision could be initiated by a failure to comply with the concepts of fairness, a judge when considering a summary judgment application also needed to consider the overriding objective of CPR Part 1. To consider one summary judgment application in respect of an adjudicator’s decision and then at a second summary judgment application to track back over old ground was inconsistent with the overriding objective of CPR Part 1. Further, if it were possible to resolve a point of law and determine it finally by way of summary judgment then the interests of the parties would be best served.
His Honour therefore considered how the payment provisions of the Act operated and came to the conclusion that the decision of the adjudicator should not be enforced. This was because the adjudicator was asked to decide what sum was “due”. The adjudicator decide that in the absence of a withholding notice Jarvis’ application should be paid, but HHJ LLoyd QC held that the amount “due” was the amount identified in Alstom’s certificate not the payment application of Jarvis.