The NEC suite of contracts are becoming more widespread in Ireland; therefore, it is of interest when the courts in England and Wales provide clarification on their interpretation. Under NEC if a party is not satisfied with an adjudicator’s decision, it may within four weeks of the decision issue a notice of dissatisfaction to the other party, otherwise the adjudicator’s decision becomes final and binding.

On occasion an issue may arise as to whether the notice of dissatisfaction is valid. This is what happened in Ravestein BV v Trant Engineering Limited [2023] EWHC 11 (TCC). In Ravestein the parties entered an agreement using the NEC3 subcontract (June 2005) Option A, which contained the following clause:

If, after the Adjudicator notifies his decision a Party is dissatisfied, that Party may notify the other Party of the matter which he disputes and state that he intends to refer it to the tribunal. The dispute may not be referred to the tribunal unless this notification is given within four weeks of the notification of the Adjudicator’s decision.

A dispute arose between the parties and an adjudicator made a decision. After the decision, Ravestein sent email correspondence to the adjudicator and other party. Ravestein argued that the email correspondence constituted a notice of dissatisfaction. The emails stated that:

After seven days you weren’t entitled to make any rulings. You must also follow the rules of the UK in 1996 by the Housing Grants, Construction and Regeneration Act (Construction Act). If you do not withdraw your ruling before tomorrow, our solicitor … will file request at ICE to reverse the ruling

And:

As stated many times we do not accept this adjudication and your jurisdiction in this case, therefore we do not recognition your ruling. The referral notice we didn’t receive within the 7 days, we received it at the 8th March 2021 at time 13.08, therefore the entire process is null and void.

The matter was referred to arbitration (the tribunal selected under the contract), and the parties agreed that the arbitrator should first determine whether the email correspondence was a valid notice of dissatisfaction. The arbitrator found that the email correspondence was not a valid notice of dissatisfaction on the grounds that it related to a jurisdictional challenge as opposed to the merits of the decision.

Ravestein sought to appeal the arbitrator’s decision pursuant to s69 of the Arbitration Act 1996 (UK), which, provided certain matters are satisfied, permits an appeal on a point of law on the basis that the tribunal’s decision was ‘obviously wrong.’ Both parties relied upon, but sought different interpretations of, the decision in Transport for Greater Manchester v Kier Construction Limited (t/a Kier Construction Northern) [2021] EWHC 804 (TCC), where O’Farrell J indicated, in relation to Option W2 of the NEC, that:

43. The Contract did not stipulate the form of words that had to be used, or the level of detail that was required in any notice of dissatisfaction. The purpose of the notice was to inform the other party within a specified, limited period of time that the adjudication decision was not accepted as final and binding. A valid notice would have to be clear and unambiguous so as to put the other party on notice that the decision was disputed but did not have to condescend to detail to explain or set out the grounds on which it was disputed.

Ravestein contended that a specific form of words for a notice of dissatisfaction is not prescribed in the NEC, nor the level of detail to which the notice must descend. The only requirement is to inform the other party that the adjudicator’s decision is not accepted as final and binding. The notice does not have to go further. Trant argued that the notice was defective as a matter of substance, because the wording failed to identify the matters with which the party was dissatisfied. The decision in Transport for Greater Manchester required the notice to identify both the matter disputed and the intention to refer the matter to arbitration.

In dismissing the appeal, Kelly J held that the arbitrator was not obviously wrong nor open to serious doubt. A challenge to the jurisdiction of the adjudicator is a very different challenge to the merits of the adjudicator’s decision. Reference in the email correspondence to the Housing Grants and Construction Generation Act 1996 could only refer to a jurisdictional challenge and not a challenge as to the correctness of the decision. Furthermore, the fact that the email correspondence was sent to the adjudicator, which was not required under the contract, militated against the email constituting a notice of dissatisfaction.

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Photo of Paul Hughes Paul Hughes

Paul Hughes is a senior associate in A&L Goodbody’s Construction & Engineering group. Paul has extensive experience in construction disputes and acts for employers, contractors and sub-contractors across multiple sectors, including, civil engineering, residential, commercial, educational, refurbishment, repair and maintenance and energy. Paul…

Paul Hughes is a senior associate in A&L Goodbody’s Construction & Engineering group. Paul has extensive experience in construction disputes and acts for employers, contractors and sub-contractors across multiple sectors, including, civil engineering, residential, commercial, educational, refurbishment, repair and maintenance and energy. Paul has expertise in disputes concerning extensions of time, loss and expense, defects, variations, payments, final accounts, true valuations, termination and asbestos. Paul has experience of dealing with disputes arising under the standard forms of contract, including, JCT, NEC, FIDIC, PWC & RIAI and ancillary agreements. Paul holds a PhD (Law) and is a solicitor in both Ireland and England and Wales. He is also a Fellow of the Royal Institution of Chartered Surveyors (FRICS), the Society of Chartered Surveyors Ireland (FSCSI), the Chartered Institution of Civil Engineering Surveyors (FCInstCES) and the Chartered Institution of Arbitrators (FCIArb).