Tue 17 Nov 2020

What is a jurisdictional challenge and what happens if one is raised?

The adjudicator's jurisdiction is of high importance. If the adjudicator does not have jurisdiction to determine the dispute, their decision will be null and invalid, and a court will not enforce it.

A jurisdictional challenge is when a Respondent makes a submission challenging the adjudicator's jurisdiction to determine a dispute.

Common jurisdictional challenges include:

  • there is no contract;
  • the contract is not a construction contract;
  • non-compliance with the adjudication procedure;
  • the adjudicator's appointment is invalid;
  • no dispute has crystallised;
  • the dispute crystallised is different from the dispute in the Notice of Intention to Refer; and
  • the dispute has already been decided in a previous adjudication;

When a jurisdictional challenge is submitted the adjudicator will ask the other party to respond to it.  Normally jurisdictional challenges are focussed on legal points and a solicitor should assist a party with drafting or responding to a jurisdictional challenge.

How the adjudicator deals with the jurisdictional challenge is very much up to them but it is normal for the timetable already set to continue to apply whilst the issue of jurisdiction is being argued.  The adjudicator will then consider each party's submissions and confirm whether in their view they have jurisdiction or not, albeit this will be a matter ultimately for the court to decide.

If the adjudicator decides they do not have jurisdiction then they should resign and that will be an end to the adjudication process.  The adjudicator will be entitled to charge fees for any work carried out to date and the Referring Party will need to rectify the issue with jurisdiction and start the process again.

If the adjudicator finds that they do have jurisdiction then the adjudication will continue.  The party that raised the jurisdictional challenge should reserve their rights in respect of the adjudicator's jurisdiction as they may want to rely on this and have a court determine if the adjudicator had jurisdiction at the time of any enforcement of the decision.

What is clear from the case law on jurisdictional challenges is that parties should raise any such challenges as soon as they become aware of them and they should state them expressly.  If a general objection to jurisdiction is raised but the party does not specify expressly what their objection is, when they could have done so, then the courts are unlikely to agree that a valid objection to jurisdiction has been raised.  The courts will not uphold an objection even if it was valid if it is only raised for the first time in enforcement proceedings if it could have been raised during the adjudication process.

Next week we will look at issues surrounding a party's failure to participate in an adjudication.   If you haven’t read our previous adjudication blogs they can be found here.  Our commonly used terms glossary for adjudication can be found in our week two blog.

Should you require any assistance with adjudication, we have a large and experienced construction team who regularly deal with adjudications and we would be happy to discuss the process with you. 

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