ADJUDICATOR’S FAILURE TO CONSIDER DEFENCE RENDERS DECISION UNENFORCEABLE

In Pilon Ltd v Breyer Group plc [2010] EWHC 837 (TCC), [2010] All ER (D) 197 (Apr) Mr Justice Coulson held that a deliberate decision by an adjudicator not to consider a defence relied upon by a defendant to an adjudication amounted to a material breach of the rules of natural justice which rendered the decision unenforceable. The mistake made by the adjudicator was to attempt to ascertain his jurisdiction by reference to the notice of adjudication when he should also have taken account of the defence lodged by the defendant. The case also provides a stark warning to a claimant who is tempted to argue before an adjudicator that the adjudicator does not have jurisdiction to consider a particular defence which has been relied upon by the defendant. As the present case illustrates, in the event that the adjudicator accepts the submission, there is a risk that a judge will subsequently decide that the adjudicator made a material error in excluding the defence and that the effect of that error is to invalidate the decision, leaving the claimant to incur the time and expense of a fresh adjudication.