Civil Engineering Reference
In-Depth Information
SBC clause 9.2 states that if a 'dispute or difference' arises under the contract and either
party wishes to refer it to adjudication, the Scheme will apply. Reference to the definitions
inclause 1.1indicates thattheScheme meansPart1oftheSchedule totheScheme forCon-
struction Contracts (England and Wales) Regulations 1998. Other JCT contracts have simil-
ar clauses, as doother standard form construction contracts. The Scheme, in paragraph 1(1),
states that any party to a construction contract may give written notice of intention to refer a
'dispute' to adjudication. Therefore, it is of the greatest importance that an identifiable dis-
pute has arisen before it can be referred to adjudication; otherwise the adjudicator will not
have the jurisdiction to deal with it. It might be thought that the existence or otherwise of a
dispute would be fairly obvious, but questions have often arisen based on the argument that
the reference to adjudication has been premature, done before the dispute has crystallised.
For example, a contractor may lodge a claim with an architect stating that it expects a reply
within two weeks, and having received no response within the allotted time, it issues a no-
tice of adjudication citing the architect's failure to decide the subject matter of the claim.
The first question to be considered is whether there was a dispute when the notice was is-
sued. Was it reasonable for the architect to respond in two weeks? If it was not reasonable,
there was no dispute and the adjudicator has no jurisdiction to decide the matter. Needless
to say, this kind of question has been the subject of very many actions through the courts.
Fortunately, after reviewing the legal authorities, the courts have formulated a series of pro-
positions to assist in deciding whether or not there is a dispute:
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The word 'dispute' which occurs in many arbitration clauses and also in s. 108 of the
Housing Grants Act should be given its normal meaning. It does not have some special
or unusual meaning conferred upon it by lawyers.
Despite the simple meaning of the word 'dispute', there has been much litigation over
theyearsastowhetherornotdisputesexistedinparticularsituations.Thislitigationhas
not generated any hard-edged legal rules as to what is or is not a dispute. However, the
accumulating judicial decisions have produced helpful guidance.
The mere fact that one party (whom I shall call 'the claimant') notifies the other party
(whom Ishall call 'the respondent') ofa claim does not automatically and immediately
give rise to a dispute. It is clear, both as a matter of language and from judicial de-
cisions, that adispute doesnotarise unlessanduntil itemergesthat theclaim isnotad-
mitted.
The circumstances from which it may emerge that a claim is not admitted are Protean.
For example, there may be an express rejection of the claim. There may be discussions
between the parties from which objectively it is to be inferred that the claim is not ad-
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