Author
Rebecca May

Rebecca May

Associate

Read More
Author
Rebecca May

Rebecca May

Associate

Read More

28 March 2019

The "slip rule" allows consequential amendments following a "gateway error"

Adjudicator's are not infallible, and it is for this reason that paragraph 22A of the Scheme for Construction Contracts was enacted such that "The adjudicator may on his own initiative or on the application or a party correct his decision so as to remove a clerical or typographical error arising by accident or omission."

(1) Axis M&E UK Limited (2) Axis Plumbing NSW PTY Limited v Multiplex Construction Europe Limited [2019] EWHC 169 (TCC) considers the direct and consequential application of the slip rule.

The parties were in dispute as to the valuation of variations and contra charges, and consequently Axis' entitlement to payment. Axis therefore referred this dispute to adjudication. The adjudicator concluded that the variations should be valued at £980,170.76 higher than Multiplex' valuation and the value of the contra charges should be valued at £246,886.37 (as opposed to Multiplex' valuation of £783,924.60). On this basis it would seem prima facie obvious that a sum would be due to Axis.

However, the adjudicator calculated the final sum due from an incorrect starting point. It would seem that there was some confusion as to what had been paid and following discussion with the parties the adjudicator based his calculation on a starting point of £19,282,680.04 not realising that this figure included Multiplex' contra charge deduction of £783,924.60. The starting point should therefore have been £20,066,604.64.

The adjudicator later sought to amend this arithmetical error, add interest and direct Multiplex, rather than Axis, to pay his fees.

The issues boiled down to whether the amendment was a "clerical or typographic" one; ie whether it was an amendment to give effect to the adjudicator's initial reasoning, or whether it was an attempt to revisit the decision and decide something different following additional thought. The court determined that the amendment was permissible; the adjudicator had substantively found in Axis' favour on both of the issues in dispute, and had merely erroneously calculated the sum due between the parties as a result of starting from the wrong figure. To amend this does not amend any reasoning.

It therefore followed to be discussed whether an adjudicator can further amend his decision to give effect to the consequential effects of this initial error. Ie the winning and losing positions had been reversed and so the adjudicator now wished to order that Multiplex, rather than Axis, pay his fees. Secondly, interest on an award need only now be considered following an award in Axis' favour.

Whilst the issue of whether consequential amendments to an adjudication decision had not come before the court before, this issue had been heard in relation to an arbitration decision. It had been held that an arbitrator did have power to make consequential amendments because the parties have contracted to refer disputes to arbitration and this permission could be extended to include dispute as to consequential amendment, and secondly the principles of equity and natural justice require amendment to be made to issues impacted by the initial amendment. The court applied this decision to enable the adjudicator to make consequential amendments to his decision following amendment in accordance with the "slip rule".

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