On 19 April 2024, the Irish High Court delivered judgment in McGill Construction Ltd v Blue Whisp Ltd [2024] IEHC 205. The key issues before the court were whether the adjudicator had jurisdiction to determine a preliminary issue in respect of their own jurisdiction and what constitutes valid grounds to resist the enforcement of an adjudicator’s decision under the Construction Contracts Act 2013 (the Act).

The court considered that as an exception to the general principle that an adjudicator does not have jurisdiction to make a determination to their own jurisdiction, the parties can, ‘by agreement’, confer jurisdiction upon the adjudicator to make a determination on its own jurisdiction which is binding upon the parties. Thereafter, the court concluded that:

  • a dispute can encompass more than one payment claim notice so as to render valid the notice of intention to refer
  • subject to the contract stating otherwise, the referral of a payment dispute is deemed received by the adjudicator once the email containing same is received by the “information system” (mail server) containing the adjudicator’s email inbox

Background

McGill, the contractor, referred a payment dispute to adjudication against Blue Whisp, the employer. The employer raised an initial jurisdictional objection on the basis that the notice of intention to refer was defective by virtue of it being based on a payment dispute arising from two separate payment claim notices. Following a preliminary hearing, the adjudicator decided that the notice of intention to refer was not defective and subsequently awarded €1.25m to the contractor in the substantive decision (the Decision).

The employer refused to comply with the Decision and the contractor therefore brought enforcement proceedings.  The employer resisted enforcement on several grounds, including that:

  1. the parties had not conferred jurisdiction on the adjudicator to determine a preliminary issue;
  2. the notice of intention to refer to adjudication was invalid in that it encompassed a dispute in relation to more than one payment claim notice;
  3. the formal referral of the payment dispute to the adjudicator was made outside the seven day period prescribed under the Act; and
  4. the adjudicator acted in breach of fair procedures in deferring their decision in respect of a claim for defective works to be addressed in two related adjudications then pending before her.

Decision

Before considering the validity of the notice of intention to refer, the court first had to consider whether the parties had conferred jurisdiction on the adjudicator to make a binding decision on this issue in the first instance. In determining that the parties had conferred jurisdiction, Simons J held (at paragraphs 17 & 18) that:

“[The] general principle is subject to the exception that the parties to a construction contract can, by agreement, confer jurisdiction upon the adjudicator to make a determination on jurisdiction which is binding upon them…This concept is sometimes referred to as kompetenz-kompetenz…

….It is a question of fact in any particular case as to whether the parties have reached such an ad hoc agreement to allow the adjudicator to make a binding determination on their own jurisdiction…A party, who has made an outward representation that they would be bound by a decision of the adjudicator on a jurisdictional issue, should not normally be permitted to resile from that representation.”

Accordingly, the court decided that the adjudicator’s finding on the notice of intention to refer was valid and binding on the parties and the employer could not now “seek to challenge the adjudicator’s finding in these enforcement proceedings”. Notwithstanding this, the court addressed the question of whether a payment dispute can encompass more than one payment claim notice, in stating (at paragraphs 31 & 33) that:

“The statutory language is broad: there is nothing in the wording which confines a “payment dispute” to the amount claimed in an individual “payment claim notice”.  It is sufficient that the dispute relates to payment arising under the construction contract…

Such a procedural requirement would be formalistic and would be inconsistent with one of the principal purposes of the Construction Contracts Act 2013, namely that the adjudication process be expeditious….”

Separately, in relation to the employer’s contention that the referral was not made to the adjudicator on time by virtue of being received by the adjudicator’s email inbox one minute late, Simons J relied on sub-sections 21(2) and (3) of the Electronic Commerce Act 2000 and dismissed the employer’s argument that a referral is not made until such time as it reaches the email inbox of the intended recipient, in stating (at paragraphs 43 & 44) that:

“The combined effect of these statutory provisions is that where, as in the present case, the intended recipient has designated an email address at which electronic communications are to be received, then an email is deemed to have been received at the time it enters the information system (rather than the time when it comes to the attention of the addressee)…The email is deemed to have been received from the moment of its initial entry into the information system, i.e. upon its receipt by the mail server.  It is this event, not the subsequent transmission to an individual email inbox, which is crucial.  An individual email inbox does not constitute an “information system” for the purpose of the statutory definition.  Rather, the information system is the mail server; an individual email inbox is, at the very most, a component of the overall “information system”.

It follows that the referral to adjudication in the present case was thus deemed to have been received at 23.59 hours on 21 November 2023, i.e. within the seven day time-limit.”

Finally, when considering the employer’s allegation that the adjudicator had failed to consider a defence of set-off for defective works, Simons J ruled (at paragraph 58) that there was no unfairness in circumstances where:

Here it is correct to say that the question of the allegedly defective works was not determined as part of the (first) adjudication. Crucially, however, it was determined in the context of the two later adjudications and, importantly, the timing of the payment in respect of the first adjudication was deliberately staggered.  Looking at the matter in the round, therefore, there has been no breach of fair procedures.  The Respondent has been afforded a full opportunity to ventilate its argument in relation to the allegedly defective works and a determination made in advance of its obligation to discharge the first adjudication award coming into force.”

Conclusions

This judgment provides a clear analysis of the circumstances in which jurisdiction can be conferred upon an adjudicator to determine their own jurisdiction. Separately, in addressing the employer’s contentions around the timing of the delivery of the referral, based on the facts in this case, Simons J set out clear parameters as to when a referral is deemed to have been received by an adjudicator by reference to the Electronic Commerce Act 2000.

What is becoming apparent from the court’s recent judgments in relation to enforcement is that the court is building upon and developing the principles established in earlier judgments. To the extent that a ground of opposition is novel, as was the case in this enforcement, the court develops and applies new principles where appropriate.