Effective Communication, Lessons from Case Law for Commercial Professionals

“A communication has effect when it is received at the last address notified by the recipient for receiving communications or, if none is notified, at the address of the recipient stated in the Contract Data”

– NEC Engineering and Construction Contract.

The Introduction

In March of 2021, the British Technology and Construction Court (TCC), gave decision on a case between two parties, in relation to seeking final determination of a dispute which had been previously referred to adjudication.

The court presided over how the Claimant had accepted a previous decision by the adjudicator to award damages, plus interest, in respect to an EoT (Extension of Time) dispute to the Defendant, however the acceptance of the decision was communicated as conditional by the Claimant in so far as, the Claimant's right to seek final determination of the decision via the court was reserved.

When the issue reached court, the Defendant believed the matter should be set aside for failure to comply with the conditions of the contract following the adjudicators decision, namely time scales, and errors made by the Claimant in their methods of communicating the dissatisfaction. The Defendant in a nutshell claimed that the court had no jurisdiction in the matter.

The project was for the design and build of bus interchange, and the works were to be undertaken by the Defendant in accordance with the NEC Engineering and Construction Contract, with bespoke amendments.

Claimant’s Submissions

The Claimant (abridged) advised that the decision reached by the adjudicator, was not valid and stated in their communications to the Defendant that:

“it is clear that he [the adjudicator] has erred in law and in his interpretation and application of the express terms of the contract between the parties in a number of fundamental respects”.

The Claimant also stated to the Defendant, in the post adjudication decision communications, that there was:

“intention to seek formal resolution to reserve the outcome of the Decision to the Court”

Defendant’s Submissions

The Defendant's stance (also abridged) on the matter(s), and according to their representation at the time of the hearing, was:

1.     The Claimant had failed to provide a valid notice of their dissatisfaction with the decision, within the expressed time scales of the contract (4 weeks).

2.     The Defendant's representation also advised; that Claimant had failed to specify matters to which they were dissatisfied with.

3.     Moreover, and echoing the above, the Defendant also advised that the letter to which the Claimant sought to rely on was lacking substance.

4.     The Defendant also advised that communications had not been issued in the correct manner according to the contract, and to the address stated within the contract data.

The Claimant's representation issue challenge on each of the above elements on no less than five fronts, the full details of which can be found within the Approved Judgement paper.

The Court's Findings

The TCC having examined the arguments by the parties, raised a number of valid and interesting points in their discussions, some of which [if not all] provide valuable lessons for those working within the commercial management arena or legislative fields. (See lessons below)

The court found that both parties sought to rely on the decision of Anglian Water Services Ltd v Laing O’Rourke Utilities Ltd, 2010, of which contained comparable points.

Considering Anglian, the TCC accepted that the submission of any documentation relevant to the adjudication was sufficient notice under the conditions of the contract, thus confirming that the Claimant's notice to refer the matter to the courts was indeed valid, contrary to the Defendants' stance.  

The TCC also carefully considered the interpretation of the expressed terms of the contract, and found that clause 13.2 of the contract stipulated that:

“A communication has effect when it is received at the last address notified by the recipient for receiving communications or, if none is notified, at the address of the recipient stated in the Contract Data.”

The courts advised that the above provision did not require communications to be sent [exclusively] to the address of the recipient as stated in the contract data, and duly relied upon by the Defendant, and that this clause was merely to act as a backstop position, should the parties not agree an alternative address for the purposes of communications.

The court also explained how the parties had in fact agreed a process and an alternative address of the issuing of communications, as the contract and the project required commercial communications to be issued via the “change management tool”.

The only listed exceptions to the use of this tool, was documents that were deemed to difficult to be delivered electronically and notices did not fall within this category for exception.

The court therefore concluded that the parties had in fact notified an alternative address and that electronic mail was a mutually accepted form of communication for matters of commercial record.

The Court's Conclusion

The court decided that the Claimant had indeed given valid notice of their dissatisfaction with the adjudicators decision and so preserved their right to challenge the adjudicators decision in court.

The court ruled that the Defendant’s stance that the court lacking in jurisdiction to hear the part 8 claim, in respect to setting the matter aside was dismissed.

The Lessons

The following have been observed as lessons to be learnt from this case:

1.     The terms of the contract need to be fully understood and commercial managers and a like, need to be aware of conflicting or ambiguous clauses in relation to matters of communication or any other such matters under the contract.

2.     Where ambiguity has the potential to arise, be that in matters of practical process, communication, or other such elements in relation to the contract, clarity should be sought and agreed between the parties.

3.     To avoid or at least limit the potential for challenge on matters of practice, conduct, decisions, jurisdiction, or any other such element in relation to the contract, or matters of dispute resolution, expressed time scales should be adhered to.

Disclaimer

The views, opinions, interpretations of source data and other such comments contained within this blog are those purely of the author and are not representative of any organisation to which the author may be employed by or affiliated with.

The reader is encouraged to satisfy to his or her own conclusions of the information contained herein.

The reader is also advised that the information contained herein is by no means to be relied upon as guidance or legal advice.

Source of Information

Approved Judgement, Case No HT-2020-000293,heard before Mrs Justice O’Farrell DBE, in the Technology and Construction Court, date deemed to be 31/03/21.