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

Pursuant to section 108(1) of the HGCRA 1996, an Adjudication is limited to disputes which are “under the contract”.

Article 5 of the Building Contract mirrors this wording as follows:

“If any dispute or difference arises under this Contract either Party may refer it to adjudication in accordance with clause 39A” (emphasis added).

By contrast, Article 6A of the Building Contract (which deals with referral to arbitration) reads, in so far as material, as follows:

“…if any dispute or difference as to any matter or thing of whatsoever nature arising under this Contract or in connection therewith…shall arise between the Parties…it shall be referred to arbitration in accordance with clause 29B and the JCT 1998 edition of the Construction Industry Model Arbitration Rules (CIMAR)” (emphasis added).

The issue arising between the parties on Ground 2 concerns the meaning of the words “under the contract” in section 108(1) HGCRA 1996. Ardmore’s primary case is that they are to be interpreted narrowly; that there is in general terms a difference in meaning and scope between the words “under the contract” and “connected with” the contract – the former being more limited in scope than the latter - and that the difference in wording in Articles 5 and 6A of the Building Contract is a clear indicator that the draftsman of this Building Contract intended the words in Article 5 to have a more limited scope. Accordingly, Ardmore submits that the words “under the contract” are not capable of encompassing a claim under the DPA 1972 and that the Adjudicator had no jurisdiction to decide that claim.

Ardmore accepts that in Fiona Trust, the House of Lords deprecated linguistic distinctions of this kind in the context of interpreting the wording of an arbitration clause, but it says that the rationale of the court in that case does not apply to adjudications. Alternatively, Ardmore contends that there is, at least, a lack of certainty or consistency over the meaning of the words “under the contract” in various authorities decided since Fiona Trust and that this state of affairs is also reflected in the leading text books.

BDW rejects these arguments. It points out that the courts have emphasised that the wording of dispute resolution provisions should not be interpreted narrowly and it contends that the overwhelming weight of the authorities tend to the view that the Fiona Trust reasoning applies equally to adjudication provisions – specifically it rejects the existence of any real uncertainty or inconsistency on this score. Further it rejects the contention that the distinction between the wording in Article 5 and Article 6A of the Building Contract is of any real significance. Alternatively, BDW relies upon clause 2.5.2 of the Building Contract which it submits imports an obligation to comply with the DPA, such that a breach of the DPA amounts to a breach of the Building Contract, albeit a breach which attracts the 30 year limitation period.

In order to examine these competing positions, I must first consider the decision in Fiona Trust, together with (i) the subsequent authorities on which each party relied in its submissions; and (ii) the leading text books to which I was referred.