May 1, 2015
The decision of the Singapore High Court in JRP & Associates Pte Ltd v Kindly Construction & Services Pte Ltd should be reviewed by every adjudicator and adjudication practitioner.
Background to the Case
An unhappy respondent, Kindly Construction & Services Pte Ltd ("Kindly"), applied to set aside an adjudication determination ("the AD") which determined that it pay JRP & Associates Pte Ltd ("JRP"), inter alia, S$105,317.76 and 70% of the adjudication costs. The AD also dismissed Kindly’s counterclaim on the basis of insufficient substantiation.
The grounds for Kindly’s application were that the adjudicator had (i) exceeded his powers by calling for a "Preliminary Meeting" before the adjudication commenced; (ii) failed to comply with the principles of natural justice; and (iii) breached his duty to avoid incurring necessary expenses.
The Singapore High Court’s Decision
The Court did not set aside the AD and held as follows:
(1) While the adjudicator acted in excess and breached his duties, the breach of such duty should not render the AD invalid
Although the adjudicator did exceed his powers by calling for an adjudication conference and re-labelling it as a "Preliminary Meeting" after he probably realised his mistake, the Court held that he had only acted in excess of his powers technically as he did not deal with any substantive matters at the 90-minute "Preliminary Meeting". The Court noted that while an adjudicator has the power to call for a conference before an Adjudication Response was submitted, such conference should not deal with substantive matters if it is prior to the commencement of the adjudication, i.e. it should only deal with administrative matters. In the Court’s view:
"…it cannot be the intention of the Act that an adjudicator has the power to shorten indirectly the already short time-period of seven days afforded to a respondent to lodge an adjudication response. Furthermore, it would not be fair and may well amount to a breach of natural justice for an adjudicator to go ahead and deal with substantive matters at the adjudication conference before a respondent has managed to lodge its adjudication response and before an adjudicator is even aware of what the respondent’s response is going to be, should the respondent fail to file its adjudication response in time for the adjudication conference."1
Further, the Court held that breaching the duty to avoid incurring unnecessary expense is not a valid ground to set aside the AD because on the facts, such breaches of the SOP Act are not important enough to warrant the AD to be set aside.
(2) The adjudicator did not breach the rules of natural justice
The compressed timelines in adjudication are well known; both to counsel and to the adjudicator. As adjudication applications become increasingly complex and of higher value, it is not uncommon for adjudicators to request for more time to carefully deliberate and reach a fair and just determination. In the present case, the adjudicator asked for more time but Kindly refused, refusing in some exchanges which Kindly then latched on to advance its argument of apparent bias:
"The Adjudicator said "there is a need to have mutual empathy" which according to Kindly Construction, insinuated it had none;
The Adjudicator asked "Is this reasonable?", referring to Kindly Construction’s objection to the extension of time to render the Adjudication Determination;
The Adjudicator said that Kindly Construction was pressurising him and his whole schedule was upset; and
The Adjudicator made a veiled threat when he asked, "Do you really want to start off the adjudication by making it so difficult".2
Notwithstanding the above and a statement by the adjudicator that :[He was] the master of the proceedings”, the Court held that they were neutral intimations, and further observed that the adjudicator was indeed the master of the proceedings. The Court also examined the adjudicator’s conduct and found, for example, that some parts of his methodology were favourable to Kindly even though Kindly appeared to not have had a chance to respond to.
At the end of the day, the Court held that there was no breach in natural justice as the AD "reasonably flowed from the parties" arguments and did not fill up any fundamental deficiencies in the claimant’s case".
Takeaways from this case
be careful with what you say: adjudicators should be mindful to avoid creating an impression that may lead to a disgruntled party alleging bias. Articulation of frustrations with a party, should, as much as possible, be minimised. While the Court will no doubt carefully scrutinise allegations of bias in any form, it will be good to avoid such attacks, whether meritorious or not, on one’s reputation.
conferences: don’t feel overwhelmed by the 15 or more arch files that the Singapore Mediation Centre forwards to you. Adjudication Responses and Scott’s Schedules often focus all parties on the issues to be determined, but feel free to call for a short conference, perhaps over a telcon, to sort out procedural timelines and oral hearings.
not every breach is a material one such that the adjudication determination should be set aside. Hence, it is important to ascertain the effect of breaches before taking the next step to Court after an adjudication determination.
1  of the grounds of decision
2  of the grounds of decision