Hitec Power Protection BV v MCI Worldcom Limited
Thursday, 15 August 2002
Key terms: Enforcement of Adjudicator's Decision - Challenge to jurisdiction - Summary judgment - Purchase Framework Agreement - Corporate personalities - No dispute - Reservation of position - Purchase Orders - MF1 Standard Form 1988 Edition
The Claimant, Hitech Power Protection VB, applied for summary judgement in the sum of £792,069.65 together with fees of £9,928.76 in respect of an Adjudicator's decision dated 24th July 2002. A Purchase Framework Agreement ("PFA") dated 26th May 2000 between the Defendant and the Claimant provided for the procurement of design, manufacture, supply, installation, testing and commissioning of diesel engine road - free, UPS and HV switch gear. The PFA provided a framework within which the Defendant "on its own behalf and as agent of the participating affiliates" could issue tenders and purchase orders for the carrying out of works referred to in the PFA. An "affiliate" was a subsidiary of the Defendant or a company controlled by the Defendant. A dispute arose in respect of 4 separate purchase orders (in respect of 4 different sites) issued by 4 different affiliates of the Defendant in respect of non-payment.
The Claimant wrote to the Defendant on 14th June 2002 claiming payments direct from the Defendant pursuant to a guarantee in the PFA. On 13th June the Claimant had made 4 separate claims for outstanding payments in respect of the 4 projects. The terms of the MF1 Standard Form were incorporated in all of Purchase Orders, by virtue of the terms of the PFA and the purchase orders, and clause 52.1 provided that any dispute or difference could be referred to adjudication. Clause 52.6 provides that that adjudication shall be carried out in accordance with the Scheme. The Institute of Electrical Engineers appointed an adjudicator, and a decision was issued in favour of the Claimant, Hitec Power Protection VB.
The Defendant resisted enforcement on the basis that the adjudicator had no jurisdiction in that there was no dispute at the date of the Notice of Adjudication. This was mainly bases on the fact that only one day elapsed between the claim in respect of each of the 4 projects and then a claim against the Defendant under the PFA. The Claimant argued that the Defendant had fully participated in the adjudication without reserving its position, and second, that in any event a dispute between the parties existed.
HHJ Seymour QC held that the 10 day written demand requirement by the guarantee clause 4.7 in the PFA Agreement had not been followed, and so the Defendant had not been afforded an opportunity to evaluate and rationalise the claim brought by the Claimant. He therefore concluded that the Adjudicator had exceeded his jurisdiction, dismissed the application, and dismissed the action.
The Claimant wrote to the Defendant on 14th June 2002 claiming payments direct from the Defendant pursuant to a guarantee in the PFA. On 13th June the Claimant had made 4 separate claims for outstanding payments in respect of the 4 projects. The terms of the MF1 Standard Form were incorporated in all of Purchase Orders, by virtue of the terms of the PFA and the purchase orders, and clause 52.1 provided that any dispute or difference could be referred to adjudication. Clause 52.6 provides that that adjudication shall be carried out in accordance with the Scheme. The Institute of Electrical Engineers appointed an adjudicator, and a decision was issued in favour of the Claimant, Hitec Power Protection VB.
The Defendant resisted enforcement on the basis that the adjudicator had no jurisdiction in that there was no dispute at the date of the Notice of Adjudication. This was mainly bases on the fact that only one day elapsed between the claim in respect of each of the 4 projects and then a claim against the Defendant under the PFA. The Claimant argued that the Defendant had fully participated in the adjudication without reserving its position, and second, that in any event a dispute between the parties existed.
HHJ Seymour QC held that the 10 day written demand requirement by the guarantee clause 4.7 in the PFA Agreement had not been followed, and so the Defendant had not been afforded an opportunity to evaluate and rationalise the claim brought by the Claimant. He therefore concluded that the Adjudicator had exceeded his jurisdiction, dismissed the application, and dismissed the action.