HT-2024-000316 - [2024] EWHC 3235 (TCC)

Fiona Trust concerned the scope and effect of an arbitration clause in eight charterparties; specifically, first, whether the arbitration clause was apt to cover the question of whether the contract was procured by bribery and, second, whether it was possible for a party to be bound by submission to arbitration when he alleged that, but for the bribery, he would never have entered into the contract containing the arbitration clause. The arbitration clause incorporated the words “any dispute arising under this charter” and so the House of Lords was concerned with the interpretation of those words.

In his lead speech at [5]-[13], Lord Hoffmann said this:

“[5] …Arbitration is consensual. It depends upon the intention of the parties as expressed in their agreement. Only the agreement can tell you what kind of disputes they intended to submit to arbitration. But the meaning which parties intended to express by the words which they used will be affected by the commercial background and the reader’s understanding of the purpose for which the agreement was made. Businessmen in particular are assumed to have entered into agreements to achieve some rational commercial purpose and an understanding of this purpose will influence the way in which one interprets their language.

[6]

In approaching the question of construction, it is therefore necessary to inquire into the purpose of the arbitration clause. As to this, I think there can be no doubt. The parties have entered into a relationship, an agreement or what is alleged to be an agreement or what appears on its face to be an agreement, which may give rise to disputes. They want those disputes decided by a tribunal which they have chosen, commonly on the grounds of such matters as its neutrality, expertise and privacy, the availability of legal services at the seat of the arbitration and the unobtrusive efficiency of its supervisory law. Particularly in the case of international contracts, they want a quick and efficient adjudication and do not want to take the risks of delay and, in too many cases, partiality, in proceedings before a national jurisdiction.

[7]

If one accepts that this is the purpose of an arbitration clause its construction must be influenced by whether the parties, as rational businessmen, were likely to have intended that only some of the questions arising out of their relationship were to be submitted to arbitration and others were to be decided by national courts. Could they have intended that the question of whether the contract was repudiated should be decided by arbitration but the question of whether it was induced by misrepresentation should be decided by a court? If, as appears to be generally accepted, there is no rational basis upon which businessmen would be likely to wish to have questions of the validity or enforceability of the contract decided by one tribunal and questions about its performance decided by another, one would need to find very clear language before deciding that they must have had such an intention.

[8]

A proper approach to construction therefore requires the court to give effect, so far as the language used by the parties will permit, to the commercial purpose of the arbitration clause. But the same policy of giving effect to the commercial purpose also drives the approach of the courts (and the legislature) to the second question raised in this appeal, namely, whether there is any conceptual reason why parties who have agreed to submit the question of the validity of the

contract to arbitration should not be allowed to do so

[9]

There was for some time a view that arbitrators could never have jurisdiction to decide whether a contract was valid. If the contract was invalid, so was the arbitration clause. In Overseas Union Insurance Ltd v AA Mutual International Insurance Co Ltd [1988] 2 Lloyd’s Rep 63 at 66 Evans J said that this rule ‘owes as much to logic as it does to authority’. But the logic of the proposition was denied by the Court of Appeal in Harbour Assurance Co (UK) Ltd v Kansa General International Assurance Co Ltd [1993] 3 All ER 897, [1993] QB 701, [1993] 3 WLR 42 and the question was put beyond doubt by s 7 of the 1996 Act:

‘Unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement.’

[10]

This section shows a recognition by Parliament that, for the reasons I have given in discussing the approach to construction, businessmen frequently do want the question of whether their contract was valid, or came into existence, or has become ineffective, submitted to arbitration and that the law should not place conceptual obstacles in their way.

[11]

With that background, I turn to the question of construction. Your Lordships were referred to a number of cases in which various forms of words in arbitration clauses have been considered. Some of them draw a distinction between disputes ‘arising under’ and ‘arising out of’ the agreement. In Heyman v Darwins Ltd [1942] 1 All ER 337 at 360, [1942] AC 356 at 399 Lord Porter said that the former had a narrower meaning than the latter but in Union of India v E B Aaby’s Rederi A/S, The Evje [1974] 2 All ER 874, [1975] AC 797 Viscount Dihorne ([1974] 2 All ER 874 at 885, [1975] AC 797 at 814), and Lord Salmon ([1974] 2 All ER 874 at 887, [1975] AC 797 at 817) said that they could not see the difference between them. Nevertheless, in Overseas Union Insurance Ltd v AA Mutual International Insurance Co Ltd [1988] 2 Lloyd’s Rep 63 at 67, Evans J said that there was a broad distinction between clauses which referred ‘only those disputes which may arise regarding the rights and obligations which are created by the contract itself’ and those which ‘show an intention to refer some wider class or classes of disputes.’ The former may be said to arise ‘under’ the contract while the latter would arise ‘in relation to’ or ‘in connection with’ the contract. In Fillite (Runcorn) Ltd v Aqua-Lift (1989) 26 ConLR 66 at 76 Slade LJ said that the phrase ‘under a contract’ was not wide enough to include disputes which did not concern obligations created by or incorporated in the contract. Nourse LJ gave a judgment to the same effect. The court does not seem to have been referred to Mackender v Feldia AG [1966] 3 All ER 847, [1967] 2 QB 590, in which a court which included Lord Denning MR and Diplock LJ decided that a clause in an insurance policy submitting disputes ‘arising thereunder’ to a foreign jurisdiction was wide enough to cover the question of whether the contract could be avoided for non-disclosure.

[12]

I do not propose to analyse these and other such cases any further because in my opinion the distinctions which they make reflect no credit upon English commercial law. It may be a great disappointment to the judges who explained so carefully the effects of the various linguistic nuances if they could learn that the draftsman of so widely used a standard form as Shelltime 4 obviously regarded the expressions ‘arising under this charter’ in cl 41(b) and ‘arisen out of this charter’ in cl 41(c)(1)(a)(i) as mutually interchangeable. So I applaud the opinion expressed by Longmore LJ in the Court of Appeal (at [17]) that the time has come to draw a line under the authorities to date and make a fresh start. I think that a fresh start is justified by the developments which have occurred in this branch of the law in recent years and in particular by the adoption of the principle of separability by Parliament in s 7 of the 1996 Act. That section was obviously intended to enable the courts to give effect to the reasonable commercial expectations of the parties about the questions which they intended to be decided by arbitration. But s 7 will not achieve its purpose if the courts adopt an approach to construction which is likely in many cases to defeat those expectations. The approach to construction therefore needs to be re-examined.

[13]

In my opinion the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction. As Longmore LJ remarked, at [17]: ‘[i]f any businessman did want to exclude disputes about the validity of a contract, it would be comparatively easy to say so.’” (emphasis added).

I pause here to observe that Mr Pliener relies heavily on paragraph [6] of Lord Hoffmann’s reasoning. In particular, he says that it explains the rationale for the decision in relation to arbitration clauses but that the factors identified in paragraph [6], which underpin the decision in paragraph [7], are not factors which apply when one is considering adjudication. Mr Choat disagrees. He submits, to the contrary, that the ‘underpinnings’ in [6] are entirely supportive of the approach taken in Fiona Trust being applicable to adjudications. I shall have to return to this issue in due course.

Since Fiona Trust, there have been four cases in which the court has addressed the question of whether Lord Hoffmann’s rationale applies equally to adjudications.

The first, and most helpful to Ardmore, is the case of Hillcrest Homes Ltd v Beresford & Curbishley Ltd [2014] EWHC 280, (2014) 153 ConLR 179 (“Hillcrest”). This was a Part 8 claim for a declaration that the decision of an adjudicator was unenforceable, inter alia, on the grounds that he had no jurisdiction to make declarations of misrepresentation and/or negligent misstatement because claims in respect of those causes of action fell outwith the scope of the adjudication provision. As is clear from [18] of the judgment of HHJ Raynor QC, sitting as a Deputy High Court Judge, the terms of the adjudication provision were, in so far as material, in identical terms to section 108(1) HGCR 1996 and also Article 5 of the Building Contract (“[i]f any dispute or difference arises under this Contract…”). Furthermore, the arbitration clause was in what the judge described as “significantly wider terms” providing for reference to arbitration of any dispute or difference “of any kind whatsoever arising out of or in connection with” the contract.

At [50]-[51], after setting out paragraphs [12] and [13] of the speech of Lord Hoffmann in Fiona Trust, the Judge dealt with the submission that Lord Hoffmann’s reasoning is inapplicable to adjudication clauses, saying this:

“50.

…Ms Cheng submits that Lord Hoffman’s reasoning in Fiona Trust is inapplicable to adjudication clauses, which are present or implied by reason of statutory intervention. In my judgment there is considerable force in this submission.

51.

In addition the draftsmen of the JCT Contract have, presumably intentionally, chosen different formulations of disputes that may be referred in the one case to adjudication under Article 7 and in the other to Arbitration under Article 8. As stated in paragraph 18(c) above, Article 8 is expressed in much wider terms (namely “any dispute or difference….of any kind whatsoever arising out of or in connection with this contract”), in contradistinction to the words of Article 7 (“any dispute or difference [arising] under this Contract”). It seems to me that the draftsmen must be taken to have intended that the disputes capable of being referred to arbitration were wider than those capable of being referred to adjudication, where the words of Article 7 simply followed the wording of section 108 of the Housing Grants, Construction and Regeneration Act 1996, which conferred the right to refer disputes to adjudication.

52.

…the claims referred to adjudication included a claim for damages arising under section 2(1) of the Misrepresentation Act 1967, a claim which was upheld by the Adjudicator in Declarations 20 and 21, the claim for loss and expense arising under the Building Contract being rejected. In my judgment that claim under the 1967 Act was not, on the proper construction of the Building Contract, a claim arising “under this contract”. On the contrary, it was a claim arising under the Act. It follows that in my judgment the Adjudicator had no jurisdiction to determine the same”.

It would appear from these paragraphs that the primary factor that persuaded the judge of the absence of jurisdiction was the contrast between the wording of the adjudication provision and the wording of the arbitration clause. In so far as the judge considered that Lord Hoffmann’s reasoning in Fiona Trust did not apply to adjudication provisions, it is clear that his focus was on the fact that the words in the adjudication provision had derived from statute rather than from contract (“the Statute Argument”). The judge did not address the factors identified in paragraph [6] of Lord Hoffmann’s speech (on which he does not appear to have had any detailed submissions), just as he did not explain his answer to Lord Hoffmann’s underlying point that reasonable businessmen must be taken to have agreed that they would only have one forum for all of their disputes (as the learned editor of Coulson on Construction Adjudication (4^th edn) points out at 7.129).

In Aspect Contracts (Asbestos) Ltd v Higgins Construction plc [2015] UKSC 38 [2015] 1 WLR 2961 (“Aspect”), the Supreme Court was concerned with the basis of any entitlement to recover sums paid out pursuant to an adjudication decision and the limitation period for any such claim. It held that there was an enforceable right to recover any overpayment to which the adjudicator’s decision could be shown to have led, whether by contractual implication or by virtue of an independent restitutionary obligation. During the course of his speech, Lord Mance considered various arguments identified by the parties, including an argument to the effect that a ‘coterminous’ tort claim was capable of being submitted to adjudication along with a contract claim. He addressed this at [22], observing that he was “very content” to proceed on the basis that the principle in Fiona Trust applied to statutory adjudication. He went on to reject a submission that, if the principle did apply to statutory adjudication, then that would mean that a tort claim would be capable of being a claim arising under the contract and that therefore it would not be subject to section 14A or section 2 of the LA 1980, in the following terms:

“It is unnecessary to say more than that I do not, as at present advised, accept this submission. Assuming, as I am presently prepared to, that a coterminous tort claim can fall within the language of section 108(1) of the 1996 Act and paragraph 1(1), it does not follow that it ceases to be a tort claim for limitation purposes”.

It is common ground that these observations by Lord Mance were obiter. No doubt owing to their obiter nature, there is no explanation from Lord Mance as to why he was “very content” to proceed on the basis that the principle in Fiona Trust applies to statutory adjudication just as there is no detailed analysis of the decision in Fiona Trust or its underlying rationale.

At first instance in J Murphy & Sons v W Maher and Sons Ltd [2016] EWHC 1148 (TCC), (2016) 166 ConLR 228, [2017]Bus LR 916 (“Murphy”), Sir Robert Akenhead addressed the question of whether an adjudicator had jurisdiction to decide a dispute as to whether there had been a full and final settlement agreement. The adjudication clause with which the judge was concerned included both ‘under’ and ‘in connection with’ the contract.

The judge set out paragraphs [5]-[13] of Lord Hoffmann’s speech in Fiona Trust at [23] of his judgment, observing immediately that although these paragraphs refer to arbitration and involve questions of construction “there may well be useful analogies to adjudication”. At [31]-[32] he said this:

“[31] The commercial common sense spoken of by Lord Hoffmann in the Fiona Trust case has a particular resonance, albeit that it relates to a contract and arbitration, in at least the following ways:

(a)

Adjudication is expected to be consensual, albeit underpinned by statute such that one cannot exclude it from construction contracts and that there are basic requirements which must be incorporated (s 108(1)–(4)).

(b)

Parliament must be taken to have intended in relation to construction contracts and parties who agree to enter into them must have envisaged that there would be some socio-economic or commercial purpose for there to be adjudication. It is well known that Parliament intended to improve cash flow and a speedy, temporarily binding and relatively uncomplicated dispute resolution process, adjudication, so that the parties could know where they stood in a short period. To borrow Lord Hoffmann’s words by prescient analogy Parliament and the parties ‘want a quick and efficient adjudication and do not want to take the risks of delay’ (Fiona Trust at [7]).

(c)

It is most doubtful that Parliament and the parties would want as a rational legislature and business people respectively ‘only some of the questions arising out of their relationship were to be submitted to [adjudication] and others were to be decided by’ their chosen tribunal for the final dispute resolution. If there ‘is no rational basis upon which [Parliament and] businessmen would be likely to wish to have questions’ about entitlement under the original contract to be ‘decided by one tribunal and questions about’ whether some or more of claims arising under that contract had been ‘decided by another, one would need to find very clear language before deciding that they must have had such an intention’ (Fiona Trust at [7]).

(d)

‘A proper approach to construction therefore requires the court to give effect, so far as the language used by [Parliament] the parties will permit, to the [policy and] commercial purpose of the arbitration clause’ (Fiona Trust at [8]).

(e)

If there were to remain ‘the distinctions’ between arbitration, and by analogy adjudication, clauses which require arbitration or adjudication for disputes on the one hand ‘under’ and, on the other hand, arising ‘out of’ or ‘in connection with’ the underlying contract between the parties they reflect no credit upon English commercial or statute law (Fiona Trust at [11]).

(f)

In adjudication cases under the 1996 Act (coincidentally the same year as the Arbitration Act) the court: ‘should start from the assumption that [Parliament] and the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal’ (Fiona Trust at [13]).

(g)

There is no logical reason for thinking that there should be any difference in meaning or application between dispute resolution clauses (or even dispute resolution arrangements adumbrated in a statutory instrument such as the Scheme) whether in arbitration or adjudication which call for disputes arising ‘under’ the contractual or statutorily imposed dispute resolution regime to be treated jurisdictionally differently from those ‘arising ‘out of’ or ‘in connection with’ the underlying regime.

[32] In this context, I consider that the courts at the highest level have strongly signposted a departure from such previous distinctions and that the courts on adjudication cases should follow this direction. It follows that a dispute as to whether all or some of the alleged entitlements which one contractual party has against the other has been settled in a binding way arises ‘under’ the original contract. That is wholly logical because what is supposedly settled is the alleged entitlement to be paid ‘under’ the original sub-sub-contract (in this case) of Maher. It would be extraordinary and illogical if the parties here or Parliament had intended that an otherwise properly appointed adjudicator would have jurisdiction if addressing what entitlement a contractor or sub-contractor might have to be paid in all circumstances save in relation to where a dispute arises as to whether that entitlement had been settled. If Murphy was right, save by ad hoc agreement, one could never adjudicate in a construction contract on an interim or final account which had been agreed in some binding way; that makes commercial and policy nonsense in circumstances in which such agreements must occur all the time and should be encouraged and supported by retaining the right to adjudicate if one party seeks to challenge the settlement on one basis or another”.

Finally, in Bresco Electrical Service Ltd v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25, [2021] 1 All ER 697, the Supreme Court decided that a dispute can be referred to adjudication even if one of the parties is in liquidation and there are cross claims, notwithstanding that the Insolvency Rules create a single net balance between the parties; that dispute was still “under the contract”. The ratio of the decision turned on the compatibility of the adjudication and insolvency regimes. Lonsdale advanced various arguments in an attempt to persuade the Supreme Court that the single net balance created by the Insolvency Rules was not a claim “under the Contract”, but was instead a claim under Bresco’s insolvency. These included the argument (recorded at [38]) that the liberal construction afforded to similar provisions in agreements to arbitrate (by reason of the Fiona Trust principle) was inappropriate in the adjudication context “mainly because adjudication was imposed upon the parties by the 1996 Act, rather than freely agreed [i.e. the Statute Argument], but also because arbitration was different in kind from adjudication”.

Lord Briggs (with whom the other members of the court agreed) addressed this argument at [39]-[41]:

“[39] There is some reported authority, but little agreement, on the question whether the liberal construction afforded to jurisdiction provisions in arbitration agreements should inform the construction of s 108 of the 1996 Act and para 1 of the Scheme, in relation to the jurisdiction of an adjudicator. In the leading arbitration case Fiona Trust & Holding Corp v Privalov [2007] UKHL 40, [2007] 4 All ER 951, [2007] Bus LR 1719, the question was whether an arbitration agreement which conferred jurisdiction in relation to a dispute about repudiation of the contract should extend to the question whether the contract should be rescinded for bribery or misrepresentation in its inception. The House of Lords held that it did, and that this did not depend upon fine distinctions about whether the contract required that the dispute arose ‘under’ or ‘in relation to’ or ‘in connection with’ the contract.

[40] A similar issue arose in relation to adjudication under a construction contract in Hillcrest Homes Ltd v Beresford and Curbishley Ltd [2014] EWHC

280 (TCC), (2014) 153 ConLR 179. At para [50] HHJ Raynor QC saw ‘considerable force’ in the submission that the reasoning in Fiona Trust was inapplicable to construction adjudication because the provision for adjudication was the consequence of statutory intervention. By contrast in J Murphy & Sons Ltd v W Maher and Sons Ltd [2016] EWHC 1148 (TCC), (2016) 166 ConLR 228, [2017] Bus LR 916 Sir Robert Akenhead reached the opposite conclusion, treating the learning about arbitration in Fiona Trust as a useful analogy at para [23]. The editors of Hudson’s Building and Engineering Contracts (14th edn, 2019) prefer Judge Raynor’s view, at para 11–022, while the editors of Keating on Construction Contracts (Supplement to 10th edn, 2019), para 18–077 appear to veer toward recognising the force of Fiona Trust by analogy.

[41] There is in my view little to be gained by an extensive analysis of the question how close is the analogy between arbitration and adjudication for the purpose of applying or not applying the learning in Fiona Trust. There are plainly points to be made on both sides. There are obvious differences between arbitration and adjudication, but they are both types of dispute resolution procedures for which provision is made by a contract between the parties, in which recourse to that procedure is conferred by way of contractual right. I am not persuaded that the statutory compulsion lying behind the conferral of the contractual right to adjudicate points at all towards giving the phrase ‘a dispute arising under the contract’ a narrow meaning, by comparison with a similar phrase in a contract freely negotiated. The fact that, after due consideration of the Latham Report, Parliament considered that construction adjudication was such a good thing that all parties to such contracts should have the right to go to adjudication points if anything in the opposite direction. Indeed, the fact that the right to adjudicate is statutorily guaranteed is a powerful consideration favourable both to its recognition as a matter of construction, and to the caution which the court ought to employ before preventing its exercise by injunction”.

Turning to the leading textbook commentary, Ardmore drew my attention to Coulson on Construction Adjudication (4^th edn), Keating (11^th edn) and Hudson’s Building and Engineering Contracts (14^th edn). In summary:

Attempting to draw the strings of these various authorities and text book commentaries together, and having regard to the arguments of both parties, I reject Ardmore’s case that the Fiona Trust principle does not apply in respect of adjudication provisions. My reasons are as follows.

Although the Fiona Trust principle applies to arbitration clauses, I agree with Sir Robert

Against that background, while Lord Mance’s observations in Aspect as to the analogy between arbitration and adjudication are obiter and not binding on this court, it is perhaps not surprising that he expressed himself in the way that he did, i.e. that he was ‘very content’ to proceed on the basis that the Fiona Trust principle applies to statutory adjudications. He did not seek to make any countervailing points against the application of the Fiona Trust principle to adjudications, as Mr Pliener very fairly conceded during his submissions.

There is nothing in the argument that the Fiona Trust principle cannot apply by analogy to adjudication clauses simply because adjudication is a creature of statute (notwithstanding that the Statute Argument was considered in Hillcrest at [50] to have “considerable force”). On the contrary, that Parliament considered all parties to appropriate contracts should have a right to adjudicate “points if anything in the opposite direction” - see Bresco at [41]. In my judgment, the origin of the clause (whether it be by express agreement or Parliamentary provision) does not affect the principles of interpretation articulated in Fiona Trust. I agree with the observations on Murphy made by the editors of the Construction Law Reports to the effect that “Parliament should, when legislating for the construction industry, be considered to be as concerned with business common sense as contracting parties are taken to be”. Mr Pliener conceded during the course of the hearing that in light of the observations of Lord Briggs in Bresco, Ardmore could not sensibly place any weight on the Statute Argument. Importantly, those observations were expressly made having regard to Hillcrest, Murphy and the competing views of the editors of Hudson’s and Keating (see [40] of Bresco).

Absent the Statute Argument, Hillcrest is authority only for the proposition that the wording of other dispute resolution provisions may serve to narrow the scope of an adjudicator’s jurisdiction (see [51]). This is of course an argument that will depend upon the terms of the contract in any given case.

In Murphy, Sir Robert Akenhead not only considered there to be analogies between arbitration clauses and adjudication provisions, he also took the view that the “commercial common sense” spoken of by Lord Hoffmann in Fiona Trust has a “particular resonance” in relation to adjudication and that courts dealing with adjudication cases should follow the direction of travel signposted in Fiona Trust. Sir Robert Akenhead provided a careful explanation as to why this was so at [31] of his judgment and Mr Pliener has provided me with no convincing basis on which I could determine that he was wrong.

Mr Pliener points out that Sir Robert Akenhead makes no reference to either Hillcrest or Aspect in his judgment, but I do not consider this to undermine its persuasive authority. Lord Mance’s observations in Aspect are entirely consistent with Sir Robert Akenhead’s views as expressed in Murphy. In Hillcrest, the only submission recorded in the judgment against the reasoning in Fiona Trust being applicable to adjudication clauses (a submission which the judge found to have “considerable force”) was the Statute Argument. The judge in Hillcrest does not appear to have had submissions about the detailed analogies between adjudication and arbitration with which Sir Robert

Mr Pliener also submits that it is clear from [32] of Murphy that Sir Robert Akenhead was approaching the Fiona Trust issue through the prism of the point that arose in that case as to a settlement agreement. He contends that the judge was not considering the reasons at [6] in Fiona Trust which he submits underpin the outcome at [7]. Accordingly, Mr Pliener contends that the ratio of Murphy is “of limited assistance” to BDW. I disagree.

Paragraph [31] of Murphy appears to me to involve a careful and detailed analysis of the ways in which adjudication and arbitration are similar. It is not specifically tied to the factual question that was before the court in that case (to which Sir Robert Akenhead turns only in [32] of the judgment). That analysis picks up:

It is true that some of the points raised in Fiona Trust at [6] were not specifically addressed by Sir Robert Akenhead in Murphy at [31], but, dealing with these in turn, Lord Hoffmann focused on the reasons why parties are likely to want their disputes determined by a tribunal which they have chosen, namely:

I can see nothing in these features which renders Lord Hoffmann’s conclusion at [7] of Fiona Trust inappropriate or inapplicable to adjudication provisions. In so far as [6] describes the purpose of the arbitration clause, that purpose is, in a number of material respects identified by Sir Robert Akenhead in Murphy, mirrored in adjudication provisions. Accordingly I agree with [31(g)] of Murphy that there is “no logical reason” why the conclusion arrived at by Lord Hoffmann at [7], which is premised upon the accuracy of his description of the purpose of an arbitration clause, should not also apply to adjudication provisions whose purpose is similar. To use Mr Pliener’s terminology, I consider that the relevant “underpinnings” for adjudication are in many ways similar to those identified by Lord Hoffmann for arbitration and I agree with Mr Choat that this strongly supports the application of the Fiona Trust principle to adjudication provisions.

Mr Pliener raised two additional arguments in support of the proposition that the Fiona Trust principle does not apply to adjudication provisions. Both stem from observations made by the editors of Hudson’s. First, Mr Pliener submits that it is clear from the Hudson’s supplement that there is scope for Ardmore to rely upon the principles in Pepper v Hart and thus to persuade the court of Parliament’s intention that section 108(1) HGCRA 1996 should be interpreted narrowly. I do not, however, consider that this is an argument that is open to Ardmore on this application. Aside from the fact that the courts will generally resist the temptation to look at Hansard, this argument has neither been foreshadowed in Ardmore’s evidence nor (beyond the passing reference to the Hudson’s Supplement) has it been developed in any detail in its skeleton. Indeed in his reply submissions, Mr Pliener confirmed that it was not central to his case. Importantly, Ardmore has not sought to refer the court to any extracts from Hansard, just as it has not sought to explain in its evidence how the Pepper v Hart requirements are met in this case.

It is not enough on a summary judgment application of this type for a defendant to point to the suggestion in a text book that reference to Hansard would support the proposition it seeks to advance, without providing the court with any evidence whatever to that effect. I certainly do not consider that such reference is sufficient on its own to enable the court to determine that Ardmore has a realistic (as opposed to a “fanciful”) prospect of success (see Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15(i)]). I note that in its skeleton argument, Ardmore put its case on this no higher than that “it is suggested that the editors of Hudson’s are correct” (emphasis added). But this does not appear to me to satisfy the evidential burden of establishing the existence of a realistic defence that carries some degree of conviction (Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15(ii)]).

Second, Mr Pliener submits that the Building Contract was agreed long before the decision in Fiona Trust and thus the relevant factual matrix at the time of entry into the Building Contract must involve the “long standing and well-recognised distinction” identified by Hudson’s “between disputes ‘arising under’ a contract and those ‘arising in connection with’ a contract”. This distinction, which the parties and draftsman are to be taken to have been aware of, supports the proposition, says Mr Pliener, that the parties to the Building Contract made deliberate usage of different formulations in the adjudication and arbitration provisions and thus must have intended the adjudication provision to be narrower than the arbitration provision.

Once again the difficulty with this submission appears to me to be that it relies heavily upon the assertion by the editors of Hudson’s of the existence of “a long-standing and well-recognised distinction”, an assertion which suggests that the status quo prior to Fiona Trust was one of certainty as to the meaning of the different expressions “under the contract” and “in connection with the contract”. However, Mr Pliener made no attempt to justify this assertion by reference to the pre-Fiona Trust case law and, as Mr Choat points out, it is apparent from Lord Hoffmann’s speech in Fiona Trust itself at

In all the circumstances, I consider that Ardmore has no real prospect of success in arguing that the Fiona Trust principles do not apply to adjudication provisions. Ardmore has not satisfied me that there is any other compelling reason why this matter should be disposed of at trial.

In arriving at this conclusion I have borne in mind the observation of the Privy Council in Altimo Holdings v Kyrgyz Mobil Tel Limited [2011] UKPC 7, [2012] 1 WLR 1804 per Lord Collins at [84] that “[t]he general rule is that it is not normally appropriate in a summary procedure…to decide a controversial question of law in a developing area, particularly because it is desirable that the facts should be found so that any further development of the law should be on the basis of actual and not hypothetical facts”. However, Mr Pliener realistically accepted that there is no factual dispute in this matter and that accordingly this warning has considerably less traction than might otherwise be the case. Indeed Mr Pliener was unable to provide me with any convincing reason why I should not determine the Fiona Trust question on this application.

Finally, I must turn to the issue which appears to have made all the difference in Hillcrest; the significance of the use by the draftsman of different wording in the adjudication and arbitration clauses. It was not suggested that this was an issue in respect of which Ardmore would wish to rely upon any factual evidence and accordingly I again see no reason (and none was suggested) why I should not “grasp the nettle and decide it” (Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at

Applying the well-known principles of construction as summarised by Lord Hamblen in Sara & Hossein Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2, [2023] 1 WLR 575 at [29], the court must objectively construe the relevant words of a contract in their documentary, factual and commercial context. Given my decision as to the applicability of the Fiona Trust principle, however, it seems to me that the words of Article 5 of the Building Contract must be given a wide meaning unless there is very clear language to indicate the contrary.

I start from the assumption that the parties to the Building Contract, as rational businesspeople, are likely to have intended any dispute arising out of the relationship into which they had entered to be decided by the same tribunal – whether that be arbitration or adjudication. The nature of the adjudication process and the purpose of the HGCRA 1996 appears to me amply to support this assumption.

As Lord Briggs observed at [10] and [13] in Bresco:

“10…Speaking generally, adjudication is one of a spectrum of dispute resolution mechanisms which range from party and party negotiation at one end, through mediation, early neutral evaluation (ENE) and arbitration to litigation at the other end, lying roughly between ENE and arbitration. ENE delivers a private non-binding opinion on the merits of the dispute from an independent, respected and often expert source. Arbitration delivers a (usually) private determination from a similar source which is binding subject to very limited scope for appeal. Adjudication shares with ENE the independent, often expert, respected source together with the speed and economy of ENE, with a provisional element of binding decision, unless and until the matter in dispute is later resolved by arbitration, by litigation or by agreement.

…

13…It was designed to be, and more importantly has proved to be, a mainstream dispute resolution mechanism in its own right, producing de facto final resolution of most of the disputes which are referred to an adjudicator”.

The purpose of the Act is thus not controversial: disputes are to be resolved quickly and effectively without delay and then put to one side to be revived in arbitration or litigation only if the parties have been unable to accept the decision of the adjudicator, or have been unable to reach a compromise having regard to the information provided by that decision as to the possible outcome before the ultimate tribunal.

Against that background it is difficult to see why it would make commercial sense for the parties to want to restrict the scope of the consideration by the Adjudicator to a narrower scope of dispute or difference than could ultimately be referred to arbitration

I do not consider the fact that different wording was used for the arbitration clause at Article 6A to indicate a clear intention that the jurisdiction of the adjudicator would be narrower than that of the arbitrator (as opposed to, say, indicating merely that the draftsman was following the wording of section 108 HGCRA 1996 for the purposes of the adjudication provision) and I agree with BDW that, on a true interpretation, the contrast between the two provisions therefore has no material significance. The courts have made clear at the highest level that wording in dispute resolution provisions referring to disputes arising ‘under’ the contract should not be interpreted narrowly and in Bresco the Supreme Court took the view, albeit obiter, that the statutory underpinning of the (in this case express) contractual right to adjudicate is a factor which, if anything, weighs in favour of giving a broad interpretation to the phrase “a dispute arising under the contract”.

In all the circumstances, I am not inclined to regard the decision in Hillcrest as persuasive. In that case, the Judge was convinced of the force of the Statute Argument and his subsequent decision on construction must be seen in that context. He was not operating on the basis that the Fiona Trust principle applied by analogy and, as I have already said, he did not carry out a detailed analysis of Lord Hoffmann’s speech.

For all the reasons I have given, I find that there is no significance in the differing wording in the arbitration and adjudication provisions of this Building Contract and I consider that BDW has successfully established that Ardmore has no real prospect of success in establishing a lack of jurisdiction on the part of the Adjudicator in respect of the DPA 1972 claim for the purposes of the summary judgment application.

Finally, I must address two additional arguments.

First, BDW submits that, although its primary case on the true interpretation of Article 5 of the Building Contract is not dependent upon any reference to other provisions of the Building Contract, if anything further is needed, then that case is reinforced by clauses 2.5.1 and 2.5.2 of the Building Contract, which provide as follows:

“2.5.1

Insofar as the design of the Works is comprised in the Contractor's Proposals and in what the Contractor is to complete under clause 2 and in accordance with the Employer's Requirements and the Conditions (including any further design which the Contractor is to carry out as a result of a Change in the Employer's Requirements), the Contractor shall have in respect of any defect or insufficiency in such design the like liability to the Employer, whether under statute or otherwise, as would an architect or, as the case may be, other appropriate professional designer holding himself out as competent to take on work for such design who, acting independently under a separate contract with the Employer, had supplied such design for or in connection with works to be carried out and completed by a building contractor not being the supplier of the design.

2.5.2

Where and to the extent that this Contract involves the Contractor in taking on work for or in connection with the provision of a dwelling or dwellings the reference in clause 2.5.1 to the Contractor’s liability includes liability under the Defective Premises Act 1972 and where the application of s.2(1) of the Act is included in the Employer’s Requirements the Contractor and the Employer respectively shall do all such things as are necessary for a document or documents to be duly issued for the purpose of that section and the scheme approved thereunder which is referred to in Appendix 1”.

Given my decision on interpretation, which agrees with BDW’s primary case, it is not essential to my reasoning that I address this argument in any detail. However, having heard argument on the point, I am inclined to agree with BDW that if reinforcement is required, then, on balance, clause 2.5.2 provides that reinforcement.

Clause 2.5.1 is a deeming provision. Regardless of what its obligations under the Building Contract would otherwise be, clause 2.5.1 provides that Ardmore will have the “like liability” to the Employer as would an architect or other professional designer – whether that liability be under statute or otherwise. Clause 2.5.2 goes on to explain that where the Building Contract involves work on a dwelling, the “like liability” includes liability under the DPA 1972. This does not actually render Ardmore liable under the DPA 1972 - rather Ardmore’s liability under the Building Contract depends on whether an architect carrying out design work under a separate contract would have a liability under the DPA 1972; if so, then Ardmore will have “the like liability”.

Against that background I consider that it would be odd if the parties had intended such “like liability” (expressly provided for in the Building Contract) to be excluded from consideration by an adjudicator by reason of the wording used in Article 5. Much more likely, in my judgment, is that they intended a dispute over whether Ardmore had “like liability”, or indeed whether it was itself liable under the DPA 1972, to be determined under Article 5 as a “dispute or difference [arising] under this Contract”. Thus, on balance, it appears to me that clause 2.5.2 is of assistance in confirming the construction for which BDW contends.

Second, Ardmore drew my attention in argument to John Doyle Construction Limited v Erith Contractors Limited [2020] EWHC 2451, a case decided on very different facts, in which Fraser J (as he then was) observed at [6] that:

“…the streamlined and fast-track procedure in the Technology and Construction Court for enforcement of adjudicator’s decisions was not designed to deal with the sort of issues that arise where decisions are (as this one is) years, not months old; nor that are made in respect of construction operations and disputes that are themselves (as this one is) eight years old. This is a procedural observation, but such older background matters may not be suited in all cases to the very rapid judicial enforcement currently available in the TCC for all adjudication business, a procedure that has been refined over the last two decades to mirror the ethos of the Housing Grants, Construction and Regeneration Act 1996 that intended adjudication to be a speedy remedy…”.

However, I do not consider Fraser J’s procedural observation to advance Ardmore’s defence of the application for summary judgment on this ground. Mr Pliener accepts that the stale nature of the adjudication is not enough in itself to thwart the grant of summary judgment on an enforcement application. As Lord Mance observed in Aspect at [14], although adjudication “was envisaged as a speedy provisional measure…there is nothing to prevent adjudication being requested long after a dispute has arisen and without the commencement of any proceedings” (Footnote: ³). While I accept that the nature of this case, involving as it does claims made long after the relevant events took place, is very different from the majority of adjudication enforcement applications that come before the TCC, nonetheless this unusual feature is not sufficient on its own to establish a real prospect of a defence on Ground 2.