Eurocom Limited v Siemens PLC  EWHC 3710 (TCC)
Published 19 December 2014
This decision relates to the enforceability of the decision of an adjudicator hearing a dispute on similar facts to one which has already been determined by way of adjudication.
The decision of an adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract says so) or by agreement, in accordance with the Housing Grants, Construction and Regeneration Act 1996. An adjudicator does not have jurisdiction to determine a dispute that has previously been referred to and determined by adjudication. The decision in a subsequent adjudication considering a new dispute with similar facts to that previously determined, will not be enforceable by way of an application for summary judgment unless the new elements in dispute can be isolated and severed and only then if the second adjudicator has made allowance for the decision in the first adjudication when reaching his decision.
We have set out the facts in our first update and a link is here. One further issues that arose was whether the decision in the Second Adjudication sought to adjudicate again on the same or substantially the same matters as had been referred to and/ or decided in the First Adjudication.
Eurocom claimed that the matters referred to the First and Second Adjudications were different. The first related to Eurocom's claim for an extension of time, payment under five heads of claim under the Sub-Contract and claims for payment for variations, all of which had been rejected by Siemens before the date of the First Adjudication. In contrast, the Second Adjudication related to Eurocom's claim for damages for Siemen's breach of contract in delaying the Eurocom works, damages for Siemen's repudiatory breach of contract in terminating the Sub-Contract together with payment for variations that remained "to be advised" at the time of the First Adjudication.
Even if the two decisions did overlap, Eurocom argued that the areas of overlap could and should be readily severed so that any new element decided by the Second Adjudicator should be enforceable.
Siemens submitted that Eurocom's claim related to the value of work as at the date of termination and no further work had been done since that date to give rise to a further claim. The value of that work had been determined by way of the First Adjudication, and no further work had been done to give rise to a further claim. Siemens also claimed that most of the Eurocom claims in the Second Adjudication were not founded on new analysis or material, and Eurocom's claims that the Second Adjudication differed from the First Adjudication on the basis that it related to either a new claim for damages or that it was a final account claim as distinct from an interim account claim (which was that before the First Adjudicator) did not permit the opening up of the issues decided in the First Adjudication. Even had the First Adjudicator been wrong, the parties were still bound by it until it was successfully challenged in court.
Siemens accepted that there were certain "new" claims that could give rise to severable and enforceable parts of the decision in the Second Adjudication.
The judge identified the principle that there may be circumstances where a claim related to similar circumstances might legitimately be outside the dispute which a previous adjudicator had determined. In all cases, this will be a question of fact and degree.
The judge's conclusions
Having considered the various heads of claim, the judge decided that (subject to the "new" claims referred to above) the Second Adjudication decided elements of claim that had already been determined in the First Adjudication, such that the Second Adjudicator did not have jurisdiction to decide those elements.
Notwithstanding the fact that, in principle, the "new" claims gave rise to severable and enforceable parts of the decision, as the Second Adjudication treated the claims as independent claims from the First Adjudication and made no allowance for the binding decision of the First Adjudicator, it was not possible to isolate the "new" elements of the claim and therefore not possible to sever the decision.
The decision in the First Adjudication had not been followed in the Second Adjudication. Therefore even those "new" elements that were capable of being separated and isolated from the First Adjudication could not be enforced by way of an application for summary judgment in the Second Adjudication.