Under the Construction Contracts Act 2013 (‘CCA 2013’) a party can refer a payment dispute to adjudication. Section 6 of the CCA 2013 defines a payment dispute as ‘any dispute relating to payment arising under the construction contract.’ In the UK, although the Housing Grants, Construction and Regeneration Act 1996 (as amended) (‘HGCRA 1996’) permits any dispute to be referred to adjudication, it too confines that right to ‘a dispute arising under the contract.’ In Ireland, there is no adjudication case law regarding the parameters of the meaning ‘under the contract.’ A question arises as to whether a payment claim ‘under the contract’ should be given a broad interpretation to include a payment claim ‘in connection with the contract,’ for example payment of damages for negligence. In the context of the HGCRA 1996, a recent case in the UK, BDW Trading Limited v Ardmore Construction Limited [2024] EWHC 3235 (TCC) has considered the scope of a dispute ‘under the contract’ and concluded that a broad interpretation should be applied, which includes claims ‘in connection with the contract.’

In December 2024, the Referring Party (BDW) applied to the High Court of England and Wales to enforce an adjudicator’s decision, which held that the Responding Party (Ardmore) had breached its duties under a construction contract. The judgment raises important issues concerning statutory interpretation of the HGCRA 1996, which may be persuasive in Ireland when considering the CCCA 2013.

In October 2002, the Referring Party and the Responding Party entered a building contract (‘Building Contract’) for the sum of £22,593,000. The Building Contract covered the design, erection and completion of the shell and core, primary services and partial fitting out of apartments at the Crown Heights development in Basingstoke. Practical Completion occurred between December 2003 and June 2004. In July 2022, the Referring Party issued a Letter of Claim to the Responding Party relating to the Responding Party’s alleged liability for fire safety defects arising under (i) the Building Contract and (ii) the Defective Premises Act 1972 (‘DPA 1972’). This was followed by a Notice of Adjudication and a Referral in March 2024. The adjudicator found in favour of the Referring Party and ordered the Responding Party to pay £14,454,914.45 in damages together with the adjudicator’s costs and expenses. The Referring Party refused on the basis that the adjudicator’s jurisdiction was limited to claims arising ’under the contract’ and, as such, the adjudicator had no jurisdiction to determine a claim under the DPA 1972.

In the High Court the Responding Party presented numerous arguments to the effect that the adjudicator lacked jurisdiction. At the core of the case was whether the principles established for the interpretation of arbitration clauses in Fiona Trust & Holding Corp v Privalov [2007] 4 All ER 951 (Fiona Trust) apply in the context of adjudication. In the present case, Smyth J explained that:

Fiona Trust confirms a strongly signposted departure from previous linguistic distinctions between disputes arising on the one hand ‘under’ and, on the other hand, ‘arising out of’ or ‘in connection with’ the underlying contract between the parties. Such distinctions ‘reflect no credit upon English commercial law.

The Responding Party sought to suggest that this reasoning did not apply in the context of adjudication with one of their core arguments being the different construction of the arbitration and adjudication clauses in the Building Contract. Article 5 of the Contract, provided that a dispute arising ‘under this Contract’ could be referred to adjudication, whereas Article 6A, concerning arbitration, used both the terms ‘under the Contract’ and ‘connected with’. The Referring Party maintained that this difference reaffirmed that a narrower reading of the former term ought to be adopted for the purposes of Article 5 concerning adjudication and thus that the adjudicator could not hear a claim concerning the DPA 1972. The Responding Party also argued that Fiona Trust did not apply in the context of adjudication because the right to adjudication arises from statute, specifically section 108(1) of the HGCRA 1996. The High Court rejected these contentions and accepted that the adjudicator had jurisdiction placing no weight on the different wording of the arbitration and adjudication clauses and emphasising that the statutory basis of the right to adjudication did not affect the applicability of Fiona Trust. A broad approach to ‘under this Contract’ was applied to include claims made ‘in connection with’ the Building Contract.

The judgment is particularly significant because it makes clear that the matters that may be considered by adjudicators go beyond contractual disputes to include tortious claims related to the contract. Questions arise as to whether an Irish Court would reach a similar conclusion.

It may be that a domestic court would follow BDW on the basis that the Fiona Trust principles have been followed and applied elsewhere in several Irish decisions, for example, in K&J Townmore Construction Limited v Kildare And Wicklow Education And Training Board [2018] IEHC 770. There, in paragraph 52, Barniville J endorsed the Fiona Trust principles stating that, ’the approach to the interpretation of an arbitration agreement outlined in Fiona Trust has been and indeed should be followed in Ireland, irrespective of whether the arbitration agreement is one concerning an international commercial arbitration or a domestic arbitration’. Further examples of Irish cases applying the Fiona Trust principles include: O’Meara v The Commissioners of Public Works in Ireland [2012] IEHC 317 and Achill Sheltered Housing Association CLG v Dooniver Plant Hire Ltd [2018] IEHC 6. Yet, in the context of adjudication, the matter will require clarification. As the High Court in England emphasised, the question of whether Fiona Trust is applicable to adjudication had attracted diverse views in leading commentary prior to its judgment. An Irish judgment would be very welcome so as to clarify the meaning of ‘under the construction contract in s6(1) of the CCA 2013, the applicability of Fiona Trust to adjudication here, and thus, whether adjudicators have jurisdiction over claims related to the contract.