BREACH OF NATURAL JUSTICE DOES NOT PREVENT ADJUDICATOR FROM RECOVERING HIS FEES

In Systech International Ltd v PC Harrington Contractors Ltd [2011] EWHC 2722 (TCC), [2011] All ER (D) 240 (Oct) Mr Justice Akenhead held that the invalidity of a decision reached by an adjudicator did not have the consequence that there had been a total failure of consideration so that the adjudicator was not entitled to recover his fees from the parties to the adjudication. On the facts, the cause of the invalidity of the decision was a significant breach by the adjudicator of the principles of natural justice. It should, however, be noted that the breach was committed innocently and it is possible that an adjudicator might be unable to recover his fees if it is established that he has acted dishonestly, fraudulently or has otherwise acted in bad faith.

The facts

The present case is a further stage in the litigation which was discussed in our May 2011 issue (see pp 9-12 and the discussion of PC Harrington Contractors Ltd v Tyroddy Construction Ltd [2011] EWHC 813 (TCC), [2011] All ER (D) 162 (Apr)). In that earlier case it was held that the adjudicator had breached the principles of natural justice in construing his jurisdiction so narrowly as to disregard one of the two broad defences which had been invoked. In the present proceedings Akenhead J affirmed that the adjudicator had indeed breached the principles of natural justice. Thus he confirmed that: