1. Introduction

The Technology and Construction Court has recently refused to enforce an adjudicator's award of approximately £1.65 million in Premier Modular Ltd v Maidstone and Tunbridge Wells NHS Trust, providing a useful reminder of the limits of an adjudicator's inquisitorial role and the continued importance of natural justice within the adjudication process.

2. Background

The dispute arose under an NEC contract for the design and construction of a new theatre facility at Maidstone Hospital.

Premier Modular Ltd ("PML") alleged that Maidstone and Tunbridge Wells NHS Trust (the “Trust”) had failed to make a permanent mains water supply available in time for testing and commissioning activities, leading to delay and additional cost.

PML contended that the delay constituted a compensation event entitling it to additional time and money.

During the adjudication, PML advanced its claim on the basis of several compensation event provisions within clause 60.1 of the NEC contract.

The Trust denied that a compensation event had arisen and also argued that any entitlement was barred because the relevant notification requirements had not been satisfied.

A further issue concerned the contractual programme.

Both parties proceeded on the basis that the only accepted programme was the programme incorporated into the contract and that no subsequent revision had been formally accepted by the Project Manager in accordance with the NEC provisions.

3. The Adjudicator's Decision

The adjudicator found in favour of PML and awarded approximately £1.65 million.

However, in reaching that conclusion, the adjudicator adopted a different route to liability than the one advanced by either party.

Rather than relying upon the compensation event provisions put forward by PML, the adjudicator concluded that a compensation event arose under a different provision of clause 60.1.

In doing so, the adjudicator also concluded that a revised programme had effectively become the accepted programme, notwithstanding the fact that both parties had consistently maintained that no such acceptance had occurred.

4. The Enforcement Proceedings

PML commenced enforcement proceedings seeking summary judgment.

The Trust resisted enforcement on the basis that the adjudicator had breached the rules of natural justice.

The Trust argued that the adjudicator's central findings were based upon matters that neither party had pleaded nor addressed in submissions.

In particular, it was said that the adjudicator had determined the dispute on an entirely different contractual basis and had made findings regarding the status of the programme that were contrary to the position advanced by both parties during the adjudication.

5. The Court's Decision

The Court refused to grant summary judgment and held that the Trust had a real prospect of establishing a material breach of natural justice.

The judgment emphasises that while adjudicators are entitled to investigate issues, ask questions and test the parties' cases, they must not determine a dispute on a basis that the parties have not had a fair opportunity to address.

The Court considered that the adjudicator's reasoning may have involved deciding the dispute on an unargued contractual basis which went to the heart of the decision.

As a result, the adjudicator's award was not summarily enforced.

6. Conclusion

This decision does not alter the well-established principle that adjudicators enjoy considerable latitude when reaching their decisions.

However, it serves as an important reminder that there remains a distinction between testing the parties' cases and determining the dispute upon a basis that neither party has advanced.

Where an adjudicator identifies a potentially decisive contractual provision or line of reasoning not argued by the parties, the prudent course is likely to be to raise the issue expressly and invite further submissions before relying upon it.

Failure to do so may expose an otherwise enforceable decision to a natural justice challenge.

For adjudicators, this case is a timely reminder that even within the compressed timetable of adjudication, procedural fairness remains paramount.

7. My Key Takeaways as an Adjudicator

a) Reaching the "right" answer is not enough

Even if an adjudicator believes they have identified the correct contractual route to a decision, that route may not be available if the parties have not had the opportunity to address it. Procedural fairness remains fundamental.

b) If a new point may be decisive, invite submissions

This judgment reinforces the value of carefully drafted requests for clarification. If an adjudicator intends to rely upon a point that has not been advanced by either party, inviting submissions may avoid an otherwise successful natural justice challenge.

c) Be cautious when departing from common ground

Particular care is needed when the adjudicator's proposed reasoning requires rejection of a factual or contractual position accepted by both parties. Before doing so, it is prudent to ensure that the issue has been fully ventilated and that the parties have had an opportunity to comment.

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