Foundations: Vinci v Beumer

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• Construction and engineering - Articles

09-10-2018

Summary of the Vinci v Beumer case: The TCC enforced an Adjudicator’s decision for the payment of liquidated damages in favour of Vinci (Contractor) and rejected Beumer’s (Subcontractor) argument that the decision was wrong as the adjudicator allegedly breached the rules of natural justice.

Facts

The dispute between Vinci and Beumer has been a longstanding one. It arose after Vinci employed Beumer as a subcontractor for works at Gatwick airport. Due to several delays and and extended completion dates for Beumer’s works, Vinci requested liquidated damages. July 2018 marked the seventh adjudication between the parties, where the Adjudicator held that Beumer owed Vinci £9.67 million in liquidated damages. Following Beumer’s failure to pay, Vinci applied to the TCC to enforce the decision. 

At the TCC, Beumer stated that the Adjudicator’s decision was a breach of natural justice as it was:

0.  inconsistent with prior decisions of the same Adjudicator (the fourth  and sixth decision);
0. devoid of reasons justifying the decision; and
0. that documents held by Vinci following a dispute in 2016 regarding the same airport project were not disclosed.

Judgment

The Judge held that Beumer’s three arguments were void, as:

0. the seventh decision was not inconsistent with the decisions from the fourth and sixth adjudication. Both prior decisions dealt with assessing value, while the seventh decision also related to an extension of time –making the claims materially different and so, not capable of being consistent;
0. the Adjudicator’s reasoning was clear; and
0. Beumer was aware of Vinci’s prior 2016 dispute during their previous adjudications, however Beumer never requested for Vinci to disclosed those documents nor did it voice its concern about a breach of natural justice.                                                

Discussion

The duty of natural justice is central to the adjudication process: it ensures that parties have the right to a fair hearing led by an impartial tribunal. Beumer’s argument that the rules of natural justice were breached, enabling it to not comply with the Adjudicator’s decision was a far stretch. Several lessons can be learnt from this case, namely:

0. If an Adjudicator is involved with previous adjudications relating to the same matter, prior disclosure of his/her knowledge may aid in barring claims for inconsistencies;
0. If a Party wishes to claim a breach of natural justice at enforcement proceedings, it must raise concern about this breach before/during the adjudication process; and
0. A Party must apply to the Adjudicator for the disclosure of documents, especially if it seeks to rely on them later on.