Attack on Adjudicator's Jurisdiction Fails

Adjudicators' powers to resolve contract disputes are frequently challenged by those who are unhappy with their decisions. However, in a guideline case, the High Court has thrown out one attack on an adjudicator's jurisdiction as 'misconceived'.

A retail services company had entered into a contract with a construction company and made an advance payment of £35,000 plus VAT. An adjudicator subsequently directed the construction company to repay that sum on the basis that it had completely failed to provide anything of value under the contract.

In challenging the adjudicator's jurisdiction, the construction company argued that his decision fell outside the scope of the dispute referred to him. It was submitted that he had no power to order restitution of the money on the basis that – unlike an award of damages – this was not an appropriate remedy for an alleged breach of contract.

Directing enforcement of the adjudicator's decision, the Court found that the construction company's arguments were based on a fallacy. A total failure to provide anything of value almost invariably amounts to a breach of contract and an adjudicator has the right to award any remedy within his power, including restitution.