Adjudication: Getting the drafting right

31 March, 2015

The case of Ecovision Systems Limited v Vinci Construction UK Limited (2015) concerned the enforceability of an adjudication award.

 

Vinci was the main contractor.  Ecovision was appointed as a specialist sub-contractor to design, supply and fit a heating and cooling system.  The parties were using the NEC3 suite of contract documents. 

 

The system installed by Ecovision failed and Vinci believed the failure arose out of the design of Ecovision’s design.  The parties tried to resolve their dispute but were not able to, leading Vinci to seek a determination by adjudication.  It applied to the RICS for a nomination of an adjudicator.  The RICS duly nominated and the nominated adjudicator accepted his appointment.  Ecovision, however, declined to participate in the adjudication, citing a failure to follow the correct contractual dispute resolution provisions regarding adjudication which it said rendered the adjudication a nullity.  The issue arose because:

• The wording of the sub contract contained reference to RICS as the nominating body;

• The wording of the main contract identified TeCSA as the nominating body; but

• The sub contract was drafted by reference to the main contract, which on Ecovision’s case meant there were two different (and conflicting) contractual methods of nominating an adjudicator (not including the Scheme, which offered a third statutory method in the event that the conflict could not be resolved).

 

The adjudicator declined to withdraw, continued with the adjudication and, in the absence of any participation by Ecovision, determined the adjudication in favour of Vinci.

 

Following the conclusion of the adjudication Ecovision applied to Court for a declaration that the adjudication was of no effect, based amongst other things upon the failure to identify and then follow the correct contractual adjudication procedure. 

 

The Court had to resolve this conflict between the parties and did so in favour of Ecovision.  The rationale of the decision was that to have the main contract and sub contract containing different nominating bodies could result in some potentially bizarre consequences and that when considered in the round it could not have been intended that such a consequence could flow from the adjudication provisions in the sub contract.

 

The result of the case was that the adjudication was declared null and void. 

 

It is not uncommon for documents to be drafted with reference to others and it can also be common in the construction industry for a suite of documents to be required relatively swiftly.  While the parties could (and perhaps should) have done more to help themselves and the adjudicator (by, for example seeking to reach a consensus on the correct procedure to apply or by having that determined in the first instance) the case does highlight the importance of the consistency within contracts (not just consistency within a particular contract but also consistency across a suite of related documents), as well as the potential ramifications to the parties if that does not occur.

 

 

 

Reviewed in 2015