The claimant subcontractor, Universal Piling and Construction, applied for a declaration that an adjudicator appointed by a notice of adjudication issued by the defendant contractor, VG Clements, lacked jurisdiction to determine a dispute.

The parties had entered into a subcontract under which the subcontractor was engaged to undertake civil engineering and re-signalling works on train lines.  A dispute arose, upon completion of the works, regarding the subcontractor’s application for payment.  Subsequent to the subcontractor’s referral of the dispute to the first adjudicator, the adjudicator found that the sum claimed by the subcontractor was due as the contractor had failed to serve any valid payment notice or pay less notice.  Later, the contractor issued a defects certificate confirming that there were no defects in the works.  It also issued a purported payment notice and pay less notice valuing the subcontract works up to that date.  Subsequently, the contractor commenced a second adjudication in which it requested an assessment of the proper sum due under the subcontract by reference to the payment notice it had issued.

The subcontractor alleged that there was no contractual basis for which the contractor could issue an assessment and/or payment application under the terms of the subcontract. Therefore, there was nothing that could properly be referred to adjudication. Further, the issue in dispute was the same, or substantially similar, to what had been determined in an earlier adjudication.

Upon review of the subcontractor’s contractual argument, O’Farrell J held that the real issue was whether that proper valuation should be carried out by a tribunal or in adjudication as the Clause 50 of the subcontract did not make any payment applications and/or assessments conclusive as to the value of the works carried out. 

With regard to the similarity of the dispute to the first adjudication, Mrs Justice O’Farrell held that the contractor was seeking to refer a different dispute involving a different period of valuation.  Reviewing the substance of the notice, it was clear that the claimant was seeking a proper valuation of works carried out in a different period to those considered in the first adjudication.  The payment notice included the release of retention which was a matter that was not referred or decided in the first adjudication. As the issue in question was not the same or substantially the same as matters which had been determined in an earlier adjudication, the adjudicator was entitled to perform what he was being invited to do.  As such, this case emphasises the importance of clarity when seeking jurisdiction challenge to successfully persuade a judge that adjudication should not be allowed to proceed.