A recent case illustrates the sort of problem that can arise when a construction agreement contains ambiguous clauses and a dispute ensues under the contract.
The case concerned the procedure for dealing with disputes under the contract. Such contractual disputes are often referred to adjudicators to resolve and, in such cases, the adjudicator’s opinion is normally final. The mechanism by which the adjudicator is appointed will be contained within a clause in the contract, which will also set out the circumstances in which an adjudicator is to be appointed.
In the case in point, the wording of such a clause was in question. The clause itself stated that either party may refer a dispute to adjudication.
One of the parties to the dispute wished to have it dealt with by adjudication and argued that if they chose to do so, this made it compulsory. The other party considered that the clause merely created the opportunity to settle the dispute by adjudication if both parties agreed to use it.
The court ruled that the latter approach was correct, on the ground that the wording of the agreement did not make it clear that adjudication was intended to be compulsory, for example by the inclusion of a clause stating specifically that any dispute would be referred to adjudication.
Partner Note
Cubitt Building and Interiors Ltd. v Richardson Roofing (Industrial) Ltd. [2008] BLR 354 TCC.