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          Adjudicator slips up at the crucial moment

          Recently in Axis M&E UK Ltd v Multiplex Construction Europe Ltd the TCC was asked to consider the scope of the statutory slip rule and whether an adjudicator was entitled to apply the slip rule to correct an erroneous calculation in his original decision.

          Date: 25/04/2019

          The slip rule is a well-established principle that applies to court, arbitration and adjudication proceedings and allows for the correction of accidental mistakes or errors in the outcome of such proceedings.  Prior to 2011, adjudicators had to rely on the common law implied term discussed in Bloor Construction (UK) Ltd v Bowmer & Kirkland (London) Ltd [2000] EWHC 183 (TCC).  In Bloor it was considered that an adjudicator had authority to 'correct an error arising from an accidental error or omission or to clarify or remove any ambiguity in the decision which he has reached'.  In YCMS Ltd v Grabiner [2009] EWHC 127 (TCC) the Court went a step further to say that the adjudicator's mistake must be 'a genuine slip which failed to give effect to his first thoughts'.  Subsequently in October 2011, the new Section 108(3A) of the Construction Act 1996 and Paragraph 22A of The Scheme for Construction Contracts 1998, introduced a limited statutory slip rule which permitted an adjudicator 'to correct his decision so as to remove a clerical or typographical error arising by accident or omission'.  
           

          Background

          Multiplex appointed Axis as mechanical and electrical subcontractors for a residential development in Kensington, London.  Axis and Multiplex were in dispute about the valuation of Axis's works, and the sums due.  Axis referred the matter to adjudication in August 2018, and the adjudicator had to consider the valuation of a number of variations, Multiplex's entitlement to deduct contra-charges, and Axis's resulting entitlement to payment, totalling c. £5m.

          The adjudicator made a mathematical error in making his decision.  This led him to conclude that no money was owed to Axis.  When the error was highlighted, the adjudicator amended his decision pursuant to the slip rule; he concluded that £654,000 was owed to Axis.  Multiplex were also therefore liable for interest, and to pay the Adjudicator's fees and expenses as a result of the correction of the error.  Axis subsequently applied to Court for summary judgment seeking to enforce the amended decision.  Multiplex resisted the application on the basis that the adjudicator's original decision, to the effect that no money was owed to Axis, was binding on the parties and that the correction to the original decision was outside the scope of the slip rule.

          TCC decision

          Roger ter Haar QC (sitting as a Deputy High Court Judge in the TCC) held that the adjudicator had not exceeded his jurisdiction when amending his decision under the slip rule.  The Court referred to the earlier decision of Rok Building Ltd v Celtic Composting Systems Ltd [2009] EWHC 2664 (TCC), namely that when interpreting an adjudicator's decision, the Court should consider the context of the dispute which was referred to adjudication.  In this case, it was clear that the adjudicator had to determine the value of the variations and what, if any, contra-charges should be deducted.  Once determined, then the sums payable to Axis could be calculated.  The adjudicator had made an error in his calculation by deducting certain contra-charges twice. 

          In the present case, Roger ter Haar QC considered that this error 'was the sort of error falling within the statutory slip rule as construed by Lady Wolffe in NKT Cables A/S v SP Power Systems Ltd, namely '… an arithmetical error in adding or subtracting sums [or] … a slip in carrying over a calculation from one part of the decision to another'.  Accordingly, the court accepted Axis' submissions and granted them summary judgment for the principal sum of £634,072.89.

          In reaching his decision in relation to interest and costs, Roger ter Haar QC also referred to the slip rule provisions of the Arbitration Act 1996 and the decision in Gannet Shipping Ltd v Eastrade Commodities Ltd [2001] ALL ER (d) 74, noting that in Gannet it was deemed that 'once the door had been opened to correct that initial error, then the effect of that decision permitted and indeed, in the interests of justice, required, that any corrections consequent up the correction of that gateway error to be made'. The Court saw no difference between that situation (the correction of an Arbitrator's Award) and the correction of the Adjudicator's decision in this instance.

          Comment

          This is the first decision in England and Wales on the use of the slip rule pursuant to the Construction Act 1996 (as amended), and it raises important questions as to the scope of the slip rule particularly when the court is asked to consider consequential corrections.  Whilst the ability to make consequential corrections is needed to avoid internal inconsistency and is considered to be in the interests of justice, consequential corrections do not always necessarily stem from a clerical or typographical error; they could be, in part, an accurate reflection of the adjudicator's intentions. Therefore, this ruling could pose further difficulties.  Nevertheless, Axis provides useful guidance on the slip rule, and how the court should deal with the consequential corrections following its use.