NKT Cables A/S v SP Power Systems Ltd

Case reference: 
[2017] ScotCS CSOH 38
Wednesday, 8 March 2017

Key terms: 
Adjudication – Enforcement – Implied term – Amendment of Adjudicator’s decision

The pursuer, NKT Cables A/S, sought to enforce an amended adjudication decision for £2,143,712.28 against the defender, SP Power Systems Ltd.

NKT Cables was contracted to supply and install certain 132/33 kV electricity, pilot cables and accessories in Glasgow associated with the 2014 Commonwealth Games through a contract dated 25 November 2010. The work was suspended and then terminated. A dispute between NKT Cables and the SP Power arose regarding the balance due under the contract. The original decision ordered SP Power to pay the sum of £1,851,408.53. However, after correcting a calculation error, the adjudicator amended the decision to provide a revised sum of £2,143,712.28.

SP Power resisted enforcement of the amended decision arguing that the adjudicator had no power to amend his original decision and the correction was not within the scope of any slip rule that may be applicable under statutory law or as part of an implied term. The slip rule, if applicable, would enable an adjudicator the right to correct a typographical or clerical error in his decision. Further, SP Power maintained that the amendment was in breach of natural justice. Lastly, SP Power contended that the adjudicator failed to exhaust his jurisdiction as he failed to address substantive lines of defence or alternative valuations.

Lady Wolff considered that the adjudicator had exceeded the scope of the implied term when he amended his decision. The adjudicator did not have the power to correct a slip under paragraph 22A of the Scheme for Construction Contracts (Scotland) Regulations 1998 (SI 1998/687) as amended by regulation 3(3) of the Scheme for Construction Contracts (Scotland) Amendment Regulations 2011 (SI 2011/371). As the Scheme in its unamended form (SI 1998/687) applied, there was no statutory slip rule. Nonetheless, it was possible to imply such a term as to do otherwise “efficacy of the Scheme for adjudication would… be substantially diminished if the adjudicator had no power to correct a slip”. Lady Wolff referred to Keating on Construction Contracts (Tenth Edition), paragraph 18‑045 and Bloor Construction (UK) Ltd v Bowmer & Kirkland (London) Ltd [2000] EWHC 183 (TCC) dealing with implied terms. However, she held that the adjudicator had failed to “exhaust his jurisdiction” as he did not consider parts of the defence and failed to give adequate reasons for doing so. The adjudicator’s amended decision was, therefore, not be enforced as it went further than the remits of the implied term.

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