Skanska Construction UK Limited v (1) The ERDC Group Limited and (2) John Hunter 1

The dispute referred in the second adjudication was not the same or substantially the same as that referred in the first adjudication. The fundamental nature and parameters of the dispute were different.

Lady Paton, Outer House Court of Session.

28 November 2002

S applied to the Court for an interim interdict and interim suspension in order to halt construction contract adjudication between S and ERDC. S and ERDC had entered into a SBCC Domestic Sub-Contract Conditions DOM/C/SCOT (1997 Edition - August 1998 Revision) for landscaping works. Two adjudications arose during the course of the execution of the sub-contract works. The first related to an application by ERDC for interim payment, where ERDC believed it was owed sums in satisfaction of a claim for direct loss and expense (not measured works). The second related to S's final account and ERDC's entitlement to direct loss and/or expense.

S believed the dispute referred in the second adjudication was the same or substantially the same as that referred in the first adjudication. S sought the Adjudicator's resignation pursuant to the terms of the Sub-Contract believing the Adjudicator to be without jurisdiction. The Adjudicator refused to resign and S started injunction proceedings in Court to oust the adjudicator and halt the adjudication procedure.

S submitted that each dispute was substantially the same, namely a dispute over the correct quantification of direct loss and expense. Indeed a comparison of the two claim summaries showed similar sums claimed in respect of direct loss and expense. Further S submitted the second adjudication was time barred as ERDC had failed to provide details supporting its claim within six months of practical completion as required under the Sub-Contract.

ERDC submitted that the second valuation of measured work and direct loss and expense was carried out at a different point in time and accordingly the disputes were not in fact the same. Relying on Holt Insulation Limited v Colt International Limited, ERDC said that assessing whether a dispute was substantially the same as an earlier dispute was not just a question of assessing whether the underlying facts in each dispute were the same: the true extent of the issue or dispute had to be taken into account. ERDC also relied on the Judgment in Sherwood & Casson Limited v MacKenzie in support of its argument that there was clear recognition of the difference between interim and final valuations, not only for measured work but also for claims for direct loss and expense and disruption. As there had been a considerable accumulation and exchange of information following upon the first adjudication the dispute in the second adjudication was not substantially the same but an entirely new position. In relation to S's claim that the application was time barred ERDC submitted that not all direct loss and expense had to be ascertained within the periods provided in the Sub-Contract.

Lady Paton held that the dispute referred in the second adjudication was not the same or substantially the same as that referred in the first adjudication. Rather, in referring to Sherwood Lady Paton's view was that the 'fundamental nature and parameters of the dispute' were different. A different stage in the contract had been reached such that different contractual provisions applied and considerably more information was available by the date of issue of the Final Account. In relation to the time bar argument the contract terms did not prohibit the provision and receipt of further information and documentation on details about direct loss and expense after the six-month period following practical completion. Such a time bar would have to be expressed in clear and unambiguous language, which was not contained in the contract.

The dispute referred in the second adjudication was not the same or substantially the same as that referred in the first adjudication. The fundamental nature and parameters of the dispute were different.

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