November 2012: SUBMISSIONS TO THE ADJUDICATOR
The process of adjudication should provide disputing parties with a cost effective method of reaching a result which by definition in the standard forms of contract, is immediately binding but not yet final. Although there has definitely been a significant increase in the use of adjudication since its first introduction in South Africa by way of the New Engineering Contract Suite of documents in 1996, it is clear that both Contractors and Employers and obviously Sub-contractors where they are parties to an adjudication, remain woefully ignorant of the way in which a submission for the purpose of referring a dispute to a tribunal alternatively of defending a dispute which has been referred to the tribunal, is prepared.
Parties to the dispute particularly the referring party frequently seem to believe that the Adjudicator simply by virtue of his appointment as Adjudicator under the contract, has already familiarised himself with the terms of the contract and therefore further reference to the contract is unnecessary! Similarly, insofar as the facts of the matter are concerned, it is not uncommon for the referring or responding party to make assumptions as to the extent of the Adjudicator’s knowledge of those facts. Some contracts expressly invite a response to a referring submission, for example NEC and GCC 2010. Other contracts are silent on what happens after the referring submission has been made, for example the FIDIC forms of contract.
In this article I intend to suggest a suitable structure for the submission to the Adjudicator whether it is the referring submission or the response and also offer some guidelines as to the rights of parties to make further submissions where these do not appear to be expressly provided for in the contract between the parties.
Submissions to the Adjudicator
Submissions prepared by a legal representative of the referring party who is unfamiliar with the process of adjudication will almost certainly be structured like a pleading in arbitration or court. Very strict rules apply to such submissions and in particular it would be inappropriate to introduce evidence, legal or technical opinion, or argument. The purpose of such a pleading is simply to set out the basic facts and the law upon which the Claimant relies by way of a skeleton which will be fleshed out later, and usually by way of an oral hearing, during which the evidence will be presented by witnesses who will be subjected to cross examination.
In an adjudication however, while some contracts might suggest the content of a submission, such suggestions are neither mandatory nor exhaustive in regard to the content of a competent submission. There are in fact no restrictions as to what may be submitted to an Adjudicator (by which I also include an adjudication tribunal of three persons or a single Adjudicator) and in fact anything may be introduced, there being no mechanism in adjudication rules for the equivalent of any form of “striking out” or “exceptions” to parts of the submissions because they are alleged to be irrelevant or do not conform to the norms of that which would be expected to be included in a referral or response.
The submission is solely intended to persuade the Adjudicator to find in favour of the referring party. Accordingly there are certain common sense guidelines which will necessarily apply when drafting such a submission. Firstly, as suggested above, no assumptions should be made as to previous knowledge of the contract or the dispute insofar as the Adjudicator is concerned. The submission must accordingly be drafted as if, and this is usually the case, it is being submitted to a party who has absolutely no prior knowledge of the contractual arrangements or the dispute between the parties. A useful opening document is therefore an executive summary which briefly outlines the form of contract, the contractual arrangement between the parties, the nature of the dispute, and the way in which the referring party intends to present its case. The submission should also be properly indexed and paginated to ensure ease of access by the Adjudicator.
The dispute itself should be crisply stated as this is now what the Adjudicator is required to decide. The last thing that the Adjudicator should have to do is try and fathom, from an overall reading of the referral documentation, what it is that he is now required to determine. It is for this reason that some forms of contract require the submission to be preceded by a notice of referral simply setting out the dispute between the parties. For example the referring party may set out in such a notice of referral a statement to the effect that:
“The referring party intends to submit the dispute in regard to the extension of time and associated costs arising out of the Engineer’s decision on 01 October 2012, to adjudication”.
The referring party must now be careful that what it introduces by way of the referral documentation stays strictly within the bounds of the definition of that which is in dispute. Any attempt to widen the ambit will take the dispute outside the jurisdiction of the Adjudicator. Should the Adjudicator inadvertently rule on issues which were not originally part of the dispute, then he would have exceeded his jurisdiction and may render that portion of the decision or perhaps even the entire decision unenforceable, a most unsatisfactory state of affairs.
Having provided an executive summary the referral should continue by setting out a chronology of the events surrounding the dispute and leading to the disagreement between the parties. To the extent that the referring party wishes to rely upon the evidence of witnesses then it is appropriate to include witness statements, usually in an appendix to the referring submission, and distil the elements of those facts which are relied upon and place such facts in the overall chronology. Such witness statements will also carry more weight if they are in the form of sworn affidavits as opposed to a simple statement of the witness itself. It must also be borne in mind that there is a very high probability the Adjudicator will not require a hearing. Therefore there will not be the opportunity to provide oral evidence to the Adjudicator. Indeed generally speaking oral evidence should be avoided wherever possible.
Almost invariably questions of law or the interpretation of the contract will arise. It may therefore be appropriate not simply to state what the referring party’s interpretation of the contract and the law is, but to support such interpretation by an expert opinion from an appropriately qualified person, Senior Counsel, Senior Attorney or respected Claims Consultant. When a dispute requires the interpretation of what may be subjective wording in the contract, for example “abnormal climatic conditions” (see for example clause 22.214.171.124 of GCC 2010) and the issue between the parties is to determine whether or not the conditions were abnormal, it may be appropriate to introduce a technical opinion from a respected industry expert, in order to advance an independent view as to those climatic conditions and their probable effect on the performance of the work.
Visual evidence such as photographs or videos are frequently useful to an Adjudicator and should be included with a complete explanation of what they depict. Where the dispute involves extensions of time the only correct way to measure the impact of circumstances giving rise to the alleged claim for extension of time will be by way of properly prepared programmes preferably prepared by a competent forensic delay analyst and presented in a way which is easy to understand by an Adjudicator who may not be fully familiar with forensic delay analysis techniques, in which case an appropriate motivation by way of a statement by the forensic analyst should be included.
Timelines in adjudication are relatively short, sometimes a matter of days or weeks. Accordingly, insofar as possible, the referral should not be burdened with irrelevant or insignificant documentation. Every single piece of documentation submitted should have a purpose and it should be possible for the Adjudicator to determine that purpose. If that is not clear, the Adjudicator will not know what to do with that piece of documentation and perhaps the opportunity to establish a crucial fact will have been lost.
Finally the submission should be neatly bound or filed in an appropriate file binder and typed in at least one and a half spacing for ease of reading.
The principles set out in the referring party’s documentation should be echoed in the response. To the extent that legal or technical opinion is offered which differs from that presented by the referring party then an explanation should be given as to why the responding party’s opinions are to be preferred. Where factual evidence is challenged by the responding party then it should be done once again by way of sworn statements. However it must be borne in mind that where the Adjudicator is faced with a dispute of fact, this will be one of the most difficult aspects for an Adjudicator to resolve. Ultimately the Adjudicator may have to fall back on the basic principle that he who claims must prove on a balance of probabilities. Accordingly where the Adjudicator is left in a position of doubt as to which of the versions is the more correct he may find in favour of the defending party because of the onus of proof required to be discharged by the claiming party.
Since most adjudications will be conducted on documents only, Adjudicators must, by the rules of natural justice and whether or not additional submissions are invited by the contract, allow such submissions unless the Adjudicator is satisfied that refusing further submissions will not prejudice the requesting party. This may be very difficult to determine unless the Adjudicator has in fact had sight of the additional submission. It is therefore suggested that Adjudicators, at the request of either of the parties, should always allow further submissions. Adjudicators will definitely put themselves at risk of their decision not being enforced where procedural irregularities may give rise to prejudice being suffered by one party or the other as reflected in the decision of the Adjudicator.
Even where the Adjudicator has given an indication that he is willing to hold a meeting with the parties (I deliberately avoid the use of the word hearing since this connotes a degree of formality and the possible leading and cross examining of witnesses which should be avoided at all costs). The parties would be better served if they structured their submissions as if there were to be no meeting.
Adjudication as a process requires an intimate understanding of that process by the Adjudicator as well as by the parties to the dispute. The process itself and the quality of the outcome of the process will be considerably enhanced if the parties adhere to the guidelines provided in this article.
C D BINNINGTON