ADJUDICATOR BREACHED NATURAL JUSTICE IN FAILING TO CONSIDER DEFENCE

In PC Harrington Contractors Ltd v Tyroddy Construction Ltd [2011] EWHC 813 (TCC), [2011] All ER (D) 162 (Apr) Mr Justice Akenhead held that the adjudicator had breached the rules of natural justice in construing his jurisdiction so narrowly as to disregard one of the two broad defences invoked by the claimants. The adjudicator was held to have acted ‘wholly honestly’ but the breaches of the rules of natural justice were nevertheless material with the consequence that the decisions of the adjudicator were held not to be enforceable.

The facts

The claimants, PC Harrington Contractors Ltd, brought the present proceedings in which they sought, inter alia, a declaration that an adjudicator had committed a material breach of natural justice and that, as a consequence, his decisions in adjudications arising out of three projects involving the claimants and the defendants were unenforceable. In particular the claimants submitted that the adjudicator had construed his jurisdiction so narrowly that he had failed to have regard to the claimants’ defence that the release of the retention could not be separated from the taking of the final account and that they were entitled to raise the true value of the account as a defence by way of abatement, set-off or otherwise to defeat the claimants for payment of the retention.