Addleshaw Goddard

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Jurisdiction and misrepresentation: two important cases on the right to adjudicate

The new year has brought with it two interesting decisions from the Technology and Construction Court (TCC) that provide useful guidance on parties’ rights to adjudicate. In Twintec Ltd v Volkerfitzpatrick Ltd [2014] EWHC 10 (TCC), the TCC held that because a letter of intent did not incorporate the terms of a particular subcontract, the appointment of the adjudicator was not valid, thus its decision was open to challenge. Similarly, in Hillcrest Homes Ltd v Beresford and Curbishley Ltd [2014] EWHC 280 (TCC), the TCC denied a right to adjudicate on the basis that claims for negligent misstatement and misrepresentation were outside the ambit of the building contract’s adjudication provisions.

Volkerfitzpatrick had instructed Twintec to construct the floor slabs for a new wine warehouse and bottling plant for Accolade Wines. Volkerfitzpatrick issued a letter of intent to Twintec that required that the subcontractor carry out its works ‘in accordance with’ a standard form subcontract (DOM/2), with the intention that the letter of intent be superseded when the formal subcontract was agreed. In the event, the parties did not enter into a formal subcontract.

Accolade claimed that the floor was unfit for purpose and commenced proceedings for damages. Volkerfitzpatrick served notice of adjudication on Twintec for costs incurred in carrying out testing on the floor slabs to the tune of £850,000. In accordance with the adjudication clause in the DOM/2 subcontract, Volkerfitzpatrick applied to the RICS to have an adjudicator appointed…

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