Adjudication: the importance of names

Adjudication: the importance of names

Adjudication: the importance of names

A rose by any other name would smell as sweet” - Romeo and Juliet, William Shakespeare

While Shakespeare’s famous quote may hold true for some, when it comes to adjudication it is not an entirely accurate statement.

When preparing a notice of adjudication, it is vital the parties to the contract are named correctly. If not, the parties run the risk of an adjudicator’s decision becoming unenforceable – a costly tragedy for the successful party. Whether such an event will occur however depends on the particular circumstances of the case.

In MG Scaffolding (Oxford) Ltd v Palmloch Ltd, the TCC were asked to consider whether the use of a party’s trading name, instead of its actual name, invalidated the notice of adjudication. Adjudication proceedings had been brought by MG Scaffolding against MCR Property Group - the trading name of Palmloch. During the enforcement proceedings, Palmloch argued that the adjudicator’s decision could not be enforced as MG Scaffolding had failed to correctly identify the parties to the contract in its notice of adjudication.

The TCC concluded that MG Scaffolding’s use of Palmloch’s trading name did not invalidate the notice of adjudication and that, as a result, the adjudicator’s decision was enforceable.

Speaking further, the Judge, Mr Adam Constable QC stated that the notice of adjudication must be “construed as a whole against its contractual setting, and…how it would have informed a reasonable recipient, concentrating on the substance rather than form.”

To the reasonable recipient, MG Scaffolding’s notice clearly communicated “beyond doubt” sufficient detail as to allow a reasonable recipient to identify Palmloch Ltd as the responding party despite the use of its trading name. Information within the notice included: express references to the property and project as well as additional details such as the initial quotation, pre-contract correspondence and various payment notices. Finally, the notice itself had been correctly delivered to the named individual dealing with the project who was familiar with the background of the development.

This judgment followed the previous decision in Total M&E Services v ABB Building Technologies, where an adjudication commenced in the name of Total Mechanical and Electrical Services Ltd rather than Total M&E Services Ltd was found to be a “clear case of misdescription” that did not affect the validity of the notice. Here both parties were aware of one another’s true identities and no one had been misled. While Total Mechanical and Electrical Services Ltd had been a different company, it had made use of various similar names during the course of the contract with the same employees acting as representatives for the project each time.

Had there been a genuine lack of clarity as to the parties to the construction contract, the risk remains that the adjudicator’s decision may not have been enforceable. In order to avoid any potential tragedy, parties should take care to identify the correct contracting party. Failure to do this might, as Shakespeare put it, may ultimately lead a party to “woe, ruin, destruction and decay” later down the line  (or at least a potentially costly dispute before the courts) should the losing party seek to challenge enforcement.

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