13 August 2019

Arbitration in serial construction disputes: Dispute found to be “not the same or substantially the same”

In a recent case in the high court (Technology and Construction Court), an adjudicator’s decision was enforced on the basis that the dispute in the eighth adjudication was not the same as the dispute in the second adjudication.

The case: Hitachi Zosen Inova AG v John Sisk & Son Ltd [2019] EWHC 495 (TCC)

The court held that even though the second adjudication had concluded that a variation was valid, the eighth adjudication relating to the proper valuation of that variation was not the same (or substantially the same) dispute.

What happened?

  • Hitachi engaged Sisk to provide design and construction services in connection with a power station in Yorkshire.
  • In the second adjudication, the adjudicator decided that some events, including number 1176 (acceleration works), were variations. The adjudicator declined to value these events, however, as Sisk failed to produce evidence of the cost.
  • In November 2017, the eighth adjudication sought payment for event 1176 with new supporting evidence.
  • Hitachi challenged the decision arguing that the claim was the same or substantially the same as the second adjudication.

The Decision

  • The eighth adjudicator’s decision should be enforced.
  • It would be a question of fact and degree whether one dispute is substantially the same as another (Quietfield Ltd v Vascroft Construction Ltd [2006] EWCA Civ 1737).
  • The eighth adjudication sought the valuation of event 1176, which was what the adjudicator had declined to decide in the second adjudication. Therefore they were not the same dispute.
    Hitachi was ordered to pay Sisk £825,703.17.

Conclusion

By declining to deal with an issue, an adjudicator is not making an award. This leaves the issue open to adjudication in the future.