Can a payment adjudication never be adjudicated on twice?

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Gateley Legal

It is a well-established principle that you cannot bring an adjudication against a party where “the same or substantially the same” dispute has already been adjudicated on. The reason for this lies in paragraph 9(2) of the Scheme for Construction Contracts 1998, under which the adjudicator lacks jurisdiction to decide on the same issue and is required to resign.

However the recent case of Hitachi Zosen Inova AG v John Sisk & Son Ltd [2019] has provided some guidance on what constitutes an adjudication on “the same or substantially the same” dispute.

The issue in this case related to an instruction by Hitachi (the Contractor) to Sisk (the Sub-Contractor) to accelerate part of their works (“Event 1176”). Sisk issued a payment application which included a valuation of Event 1176, to which Hitachi responded with a payment notice rejecting any sum was owed in respect of Event 1176.

Sisk commenced an adjudication seeking (a) confirmation that Event 1176 was a variation; and (b) a decision on the value of their payment application. Sisk was partially successful in that adjudication, getting a declaration that Event 1176 was a variation. However the adjudicator claimed Sisk had not provided sufficient evidence for the valuation of the payment application. The payment application was therefore valued at £0.

There was then an interim period in which several unrelated adjudications took place between the parties.

The eighth adjudication was brought by Sisk, seeking to recover payment for the above reference payment application in respect of Event 1176.  Sisk requested a declaration that (a) Hitachi should have issued a variation order (when instructing Event 1176); and (b) an assessment of what Sisk should be paid for Event 1176. The adjudicator decided in Sisk’s favour and awarded payment of £825k.

In the subsequent enforcement proceedings Hitachi  sought to challenge the adjudicator’s decision on the basis that the payment application and Event 1176 had been previously adjudicated. Hitachi was unsuccessful. The judge emphasised:

  • The existing authority from the Court of Appeal case of Quietfield Ltd v Vascroft Contractors Ltd in which it was said: “57. It is quite clear from the authorities that one does not look at the dispute or disputes referred to the first adjudicator in isolation. One must also look at what the first adjudicator actually decided. Ultimately it is what the first adjudicator decided, which determines how much or how little remains available for consideration by the second adjudicator.”
  • It was therefore important to compare what was “referred in the eighth adjudication with what was decidedin the [previous] adjudication”.
  • In this case, the original adjudicator “expressly declined to take a view or make a decision about the proper value that could or should be attributed to Event 1176. His “value” of “£nil” was not a valuation of the variation as such; the figure “£nil” was merely the consequence of the lack of [evidence] before him” (i.e. that adjudicator has not actually valued Event 1176 at £0, he merely stated that he could not value it on the evidence he had).
  • “The referred dispute in the eighth adjudication was the valuation of Event 1176. That was precisely what the adjudicator declined to decide in the [previous] adjudication, for want of substantiating evidence at that time. The dispute referred in the eighth adjudication was therefore not the same as the dispute decided in the second adjudication.”

This case demonstrates that the same payment application can potentially be adjudicated on again, where the subsequent adjudication is referred in respect of matters which were not decided in the original adjudication.

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