Adjudicators are regularly faced with challenges to their jurisdiction. It has been settled for some time that a party wishing to challenge an adjudicator’s jurisdiction must do so as soon as it can.
Until recently it had appeared clear that as long as a party makes a jurisdictional challenge before an adjudicator, and does not consent to the adjudicator deciding his own jurisdiction, that party will be permitted to challenge the jurisdiction of the adjudicator in court (e.g. in opposing enforcement proceedings). However, a recent decision of HHJ Coulson QC appears to run contrary to such an approach. His Lordship decided that:
“A party who has a jurisdictional challenge in adjudication has a clear choice. He can agree that the adjudicator should decide the question of jurisdiction, and be bound by that result. Alternatively, he can reserve his right that, whatever the adjudicator decided, the adjudicator did not have jurisdiction to reach that conclusion.”
In this particular case, the respondent in the adjudication challenged the adjudicator’s jurisdiction. The adjudicator decided he did have jurisdiction and proceeded with the adjudication. The respondent did not when submitting that the adjudicator lacked jurisdiction expressly reserve its position to argue at any later stage that the adjudicator lacked jurisdiction. HHJ Coulson QC decided that in the absence of such an express reservation the respondent appeared to be content to be bound by the adjudicator's decision on jurisdiction and that they were therefore bound by it. The respondent, in effect, submitted to the adjudicator’s jurisdiction.
However, the judge was apparently not referred to a higher authority which goes against such an approach. The Court of Appeal held (in Rhodia Chirex, 2003):
“As to whether failure by a contracting party to reserve its position on jurisdiction would amount to a submission to it is a more difficult question, and one that is highly fact sensitive. To succeed on such a basis at trial, a claimant would have to show that such silence, when considered with all the other material facts, amounted to a clear submission to the jurisdiction.”
The Court of Appeal went on to say that a submission to an adjudicator’s jurisdiction would not usually be founded on the fact that a respondent had failed to make it clear that it was not abandoning a jurisdictional point. HHJ Coulson QC seems to say the reverse, requiring the respondent to state that it is not abandoning a jurisdictional point whatever the adjudicator decides.
Jurisdictional objections usually involve technical legal points, rather than points that go to the substance of the dispute between the parties. Yet jurisdictional points may be powerful in their effect. They can de-rail an adjudication entirely or render unenforceable an adjudicator’s decision. Although the case law is inconsistent on whether a party who wishes to take a jurisdictional point must expressly reserve its right to object throughout the adjudication it is clear that a prudent party who wishes to take a jurisdictional point should expressly reserve its position as a matter of course.
Reference: Harris Calnan Construction Co Ltd v Ridgewood (Kensington) Ltd [2007] EWHC 2738 (TCC).
Click here for a link to the judgment.
