Beumer Group UK Ltd v Vinci Construction UK Ltd

Case reference: 
[2016] EWHC 2283 (TCC)
Tuesday, 13 September 2016

Key terms: 
Adjudicator's powers and duties – Adjudicator’s bias – Application for Summary judgment

The claimant, Beumer Group UK Ltd applied for summary judgment to enforce an adjudication decision and to seek payment to it by the defendant, Vinci Construction UK Ltd of the sums paid by the claimant to the adjudicator for his costs.

On the facts, on the same day that the claimant commenced an adjudication against the defendant (“BVII”), it also commenced a second adjudication (“BLII”) against Logan before the same adjudicator, Dr Chern that concerned the same project and similar issues of delay. Neither Dr Chern nor the claimant notified the defendant of BLII.

Fraser J refused to enforce the adjudicator’s decision in BVII, finding that the adjudicator’s breach of natural justice was “plainly material” by failing to disclose to the defendant that he was in possession of material relevant to the BVII dispute by virtue of being appointed as adjudicator in BLII.

Fraser J reminded the parties “the rules of natural justice have two limbs …firstly, that a party must have an opportunity to present his own case and meet the case against him, and secondly, that the matter is decided by an impartial tribunal. It is the second of those two limbs that concerns bias, both actual and apparent.”

To justify the court’s refusal to enforce an adjudicator’s decision   Fraser J found that “the adjudication proceedings must have been obviously unfair”. As to what was obvious, he reminded the parties that “combing through what has occurred, or concentrating on the fine detail of the material before the adjudicator, to allege a breach of natural justice, will neither be encouraged nor permitted by the court” as   to do this prevents adjudications from being conducted very quickly; this speed being part of the process imposed by Parliament on those who enter into construction contracts.

Fraser J found the two cases advanced by the claimant in BVII and BLII were clearly factually inconsistent as the defendant claimed in BVII that the works were complete on a particular date, yet in BLII and in relation to the same works (or at least a sub-set of works) on the very same project it stated that the works were not yet complete and that Logan was liable to pay liquidated damages. On this point, Fraser J took a “very dim view” of the claimant’s behaviour and that he seriously doubted “that a director of a company could sign a statement of truth in two sets of legal proceedings in such circumstances saying such quite different things on the same point.”

Fraser J held that the adjudicator should have disclosed to the defendant that he was acting as adjudicator in BLII at the same time as he was acting as adjudicator in BVII. This was regardless of the fact that the other matter concerned the claimant and Logan on the same project.

Regarding the first limb of natural justice, Fraser J found that the defendant was not “given a fair opportunity to put its own case” towards an important element of the BVII dispute, namely that the claimant was advancing a case that Logan’s works remained incomplete, which supported the defendant’s case against the claimant.

Regarding the second limb, Fraser J found the adjudicator was entitled to conduct the two adjudications at the same time, but he should have disclosed to the defendant his involvement in BLII.

Fraser J found “there must be “something of substance” to found a complaint of breach of natural justice generally” and that “the “something of substance” is not only the circumstances of the other adjudication, including the non-disclosure both of its existence at all, and that Dr Chern was also the adjudicator.  It also includes the consequential keeping from Vinci … of the factually inconsistent case Beumer was advancing in the other adjudication.”

Ultimately, “the fair minded and informed observer would come to the conclusion … that something had gone rather obviously wrong and that this was a plain case of breach of natural justice.”

Key contact

Tel: +44 (0)20 7421 1986
Tel: +44 (0)20 7421 1986