“We acknowledge receipt of your decision dated 31 October and your request for correction of clerical errors. LJJ’s submissions in this regard are set out below, entirely without prejudice to LJJ’s submissions as to jurisdiction and subject to a reservation of rights to raise additional points as to jurisdiction and/or natural justice and/or the validity of the decision. … 2... The final sentence of paragraph 84 is also factually incorrect. MHL’s valuation of AfP 18 was issued on8 November 2022 , well before the decision in Adjudication 2 (5 March 2023 ). MHL’s valuation of AfP 19 dated8 December 2022 (copy attached) contained a deduction of Key Date damages of£954,285.71 . It is therefore wrong to say that the PLN issued the month after AFP18 did not deduct Key Date damages. It is also wrong to say that Valuation 17 was superseded – MHL clearly carried forward their claim for Key Date damages and LJJ maintains that the Decision should reflect the benefit that MHL have already extracted from Decision 2 and exercised their right to make deductions from LJJ’s valuations. It is understood that paragraph 84 is based on MHL’s submission from paragraph 41 of the Reply. The Adjudicator’s LOI did not request submissions from LJJ on this specific point in response, which is why LJJ are replying to this point now. In the interests of natural justice, it is submitted that the Adjudicator should take this into account for the purposes of his amended decision. Clarity on this point is essential, particularly given that LJJ may refer a dispute regarding Valuation 19 to adjudication…” 2... The final sentence of paragraph 84 is also factually incorrect. MHL’s valuation of AfP 18 was issued on8 November 2022 , well before the decision in Adjudication 2 (5 March 2023 ). MHL’s valuation of AfP 19 dated8 December 2022 (copy attached) contained a deduction of Key Date damages of£954,285.71 . It is therefore wrong to say that the PLN issued the month after AFP18 did not deduct Key Date damages. It is also wrong to say that Valuation 17 was superseded – MHL clearly carried forward their claim for Key Date damages and LJJ maintains that the Decision should reflect the benefit that MHL have already extracted from Decision 2 and exercised their right to make deductions from LJJ’s valuations. It is understood that paragraph 84 is based on MHL’s submission from paragraph 41 of the Reply. The Adjudicator’s LOI did not request submissions from LJJ on this specific point in response, which is why LJJ are replying to this point now. In the interests of natural justice, it is submitted that the Adjudicator should take this into account for the purposes of his amended decision. Clarity on this point is essential, particularly given that LJJ may refer a dispute regarding Valuation 19 to adjudication…”
“MHL’s position should be considered particularly in the context of paragraph 2 of our submissions below. Clause 2.3B.2 provides that the “Sub-Contractor agrees to pay or allow to the Contractor such…amount” [of Key Date damages]. We understand that you are alive to this distinction because of your reference to MHL’s valuation of AfP 18. You now have evidence confirming that MHL deducted Key Date damages in their valuation of AfP 19 and that, critically, the sum deducted (or allowed) in that valuation was greater than the sum considered to be due in Adjudication 5. If the Decision was not corrected, LJJ would be required to both pay and allow Key Date damages, which is clearly wrong. As a matter of arithmetic, the sum allowed (£954,285.71 ) should be deducted from the sum decided as due.”
“Paragraph 3 (third and four paragraphs) [sic: in context this must be a reference to numbered paragraph 2, third and fourth internal paragraphs] These are observations/ submissions concerned with reasoning, not an application for a correction. I concluded that Interim Application 17 and its Payless Notice were superseded by Interim Application 18, merely noting, correctly, that “MHL says” that no Key Date damages were deduced in respect of Interim Application…. However, to recognise the possibly that MHL’s submission may not be correct, a matter which my Decision did consider, it not being the intention to award double recovery, an intention not clearly reflected in the wording of the Decision, I consider that the last sentence of paragraph 138 should be amended to read: “I have so stated ordering that, if not already allowed, as envisaged in paragraph 69 of the LoI on which neither party commented, that the said sum be paid by LJJ to MHL within seven days of the date of this Decision together with such VAT, if any, as is applicable thereon in law. Paragraph 2 of the Operative part to be corrected to read; “If not already allowed, the said sum of£808,000.00 to be paid by LJJ to MHL within seven days of the date of this Decision together with such VAT, if any, as is applicable thereon in law.”
“Whilst I note McLH’s concern that the corrections I have made to paragraph 138 of the Reasons and paragraph 2 of the Operative Part fall outside of the scope of paragraph 22A of the 2011 Scheme, I remain of the view that those corrections are within that power for the reasons stated in my email of earlier today. Indeed, as LJJ submits, these corrections have similarities to those that the court in Bloor Construction (UK) Ltd v Bowmer & Kirkland (London) Ltd[2000] BLR 314 considered were within an Adjudicator’s power; albeit in that case under an implied slip rule. The question of whether Key Date damages of at least the amount referred to those two corrected paragraphs has been allowed is not addressed in the corrected Decision. That is for the parties to consider given that, as noted in my email of earlier today, the Decision does not determine whether such damages were deducted by the Payless Notice responding to LJJ’s Application which I concluded in my Decision superseded those which Decision No.2 concerned.”
“29. In NKT Cables A/S v SP Power Systems Ltd[2017] CSOH 38 in the Outer House of the Court of Session, Lady Wolffe considered a case in which it was argued that a provision equivalent to the statutory slip rule should be implied. This led her to consider the effects of a slip rule in those terms. At paragraphs [93] and [94] she said (emphasis in the original): [93] What is the scope of the slip rule? Looking at regulation 22A of the Scheme as the likely formulation of the slip rule to be implied, the scope of the rule is relatively narrow: it enables the adjudicator “to correct his decision so as to remove a clerical or typographical error arising by accident or omission”
“(1) The parties are free to agree on the powers exercisable by the arbitral tribunal as regards remedies. (2) Unless otherwise agreed by the parties, the tribunal has the following powers…. (4) The tribunal may order the payment of a sum of money, in any currency…”
“(1)A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award… (2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant— …(b)the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67) …”
“23. Contrary to the view I have expressed, I will now assume that the tribunal committed an error of law. That error of law could have taken more than one form. The judge ([2003] 1 All ER (Comm) 22, para 25) and the Court of Appeal ([2004] 1 All ER (Comm) 97, para 35) approached the matter on the basis that the tribunal erred in the interpretation of the underlying contract. Another possibility is that the tribunal misinterpreted its powers, under section 48(4) to express the award in any currency. Let me approach the matter on the basis that there was a mistake by the tribunal in one of these forms. Whichever is the case, the highest the case can be put is that the tribunal committed an error of law. 24. But the issue was whether the tribunal "exceeded its powers" within the meaning of section 68(2)(b). This required the courts below to address the question whether the tribunal purported to exercise a power which it did not have or whether it erroneously exercised a power that it did have. If it is merely a case of erroneous exercise of power vesting in the tribunal no excess of power under section 68(2)(b) is involved. Once the matter is approached correctly, it is clear that at the highest in the present case, on the currency point, there was no more than an erroneous exercise of the power available under section 48(4). The jurisdictional challenge must therefore fail… 32. In order to decide whether section 68(2)(b) is engaged it will be necessary to focus intensely on the particular power under an arbitration agreement, the terms of reference, or the 1996 Act which is involved, judged in all the circumstances of the case. In making this general observation it must always be borne in mind that the erroneous exercise of an available power cannot by itself amount to an excess of power. A mere error of law will not amount to an excess of power under section 68(2)(b). 33. For these reasons the Court of Appeal erred in concluding that the tribunal exceeded its powers on the currency point. If the tribunal erred in any way, it was an error within its power.”
“The Threshold Question 29. On this application for summary judgment there is a threshold question as to how far the court can interfere with an adjudicator’s exercise of his power under the slip rule. If an adjudicator has jurisdiction under the slip rule, to what extent can the court review the exercise of that jurisdiction by the adjudicator? This question did not arise in Bloor and was not argued in YCMS. 30. Mr. Lofthouse QC submits that the court needs to be satisfied that a slip, properly so defined, has occurred. If there is no slip then the adjudicator does not have jurisdiction. He submits that the position may be different if there was an express power to correct slips. 31. He also referred me to paragraph 2.118 of Coulson on Construction Adjudication where, referring to the decision in Bloor and its effect on the principle in Bouygues, he says that the two decisions can be reconciled and adds: “If the parties are in dispute as to the obviousness (or otherwise) of the alleged ‘slip’, or the adjudicator does not accept that an error has been made, or does accept it but only some time after the publication of the decision, then it is thought that the approach in Bouygues will remain appropriate.” 32. Mr Lofthouse submitted that it was only if the parties, in effect, agreed on the slip that the slip rule could be applied. I do not think that the passage cited expresses that view. What it is stating is that if the parties agree or the adjudicator decides that there has been a slip and does so within time, then the slip can be corrected. If that does not happen then in the circumstances set out in the passage cited, the position remains that there is an enforceable decision as set out in Bouygues. 33. Ms. Finola O’Farrell QC, on behalf of ODD, refers to the decision of the House of Lords in Lesotho Highlands Development Authority v Impregilo SpA[2006] 1 AC 221 which was cited by the court in argument. She submits that it is authority for the proposition that an erroneous exercise of a power does not constitute an act in excess of powers so as to fall outside of the jurisdiction of the adjudicator. She refers to the following passage from Mustill & Boyd on Commercial Arbitration, cited with approval by Lord Steyn at [25]: “if… [the arbitrator] applies the correct remedy, but does so in an incorrect way - for example by miscalculating the damages which the submission empowers him to award - then there is no excess of jurisdiction. An error, however gross, in the exercise of his powers does not take an arbitrator outside his jurisdiction and this is so whether his decision is on a matter of substance or procedure.” 34. She submits that, as set out by Lord Steyn at [31] and [32], the concept of a tribunal exceeding its powers necessarily assumes that the tribunal was acting within its substantial jurisdiction. 35. I accept her submission that an erroneous exercise of a power does not fall outside the jurisdiction of an arbitrator or adjudicator. However, the distinction between disputes as to the jurisdiction of an adjudicator and disputes as to ways in which that jurisdiction should be exercised is not an easy one to draw as the decision in Lesotho Highlands shows. This can be illustrated in the case of the slip rule as follows. First if the adjudicator were to exercise a slip rule when there was no express or implied slip rule, that would clearly be a decision which was outside his jurisdiction. Secondly, if the adjudicator is asked by one party to correct a slipand he accepts that an error has been made within the slip rule then if the adjudicator makes an error of fact or law in so doing, I consider that such an error does not take the exercise of the slip rule outside his jurisdiction. Finally, if theadjudicator is asked by one party to correct a slip which the other party agrees is aslip within the slip rule but in operating the slip rule he makes and error of fact orlaw, then I do not consider that the court can interfere in that decision. 36. The dividing line between exercising a wrong jurisdiction which does not exist and exercising a jurisdiction which does exist, wrongly is difficult. Each case obviously has to be considered on its facts to decide whether it is a decision within or outside the adjudicator’s jurisdiction. 37. As Dyson J said in Bouygues at [36]: “…in deciding whether the adjudicator has decided the wrong question rather than given a wrong answer to the right question, the court should bear in mind that the speedy nature of the adjudication process means that mistakes will inevitably occur, and, in my view, it should guard against characterising a mistaken answer to an issue that lies within the scope of the reference as excess of jurisdiction.” 38. In considering whether the adjudicator was acting within his jurisdiction in operating the slip rule the court should similarly guard against characterising a mistaken application of the slip rule as a decision in excess of, and therefore, outside his jurisdiction. 39. In the present case it is accepted by BAL that the slip rule is an implied term of the Sub-Contract. The Adjudicator was asked to correct a slip and accepted that he had made an error within the slip rule. In such circumstances I do not consider that the court can or should interfere with the exercise of the adjudicator’s powers within his jurisdiction. To do so would be to seek to interfere in a case where he has answered the right question and like Bouygues his decision will be temporarily binding, whether he was right or wrong in the answer he gave. 40. If I am wrong about that and the court can interfere in the decision then I have to consider the merits of the dispute. Review of the exercise of the slip rule… 54. I consider that the Adjudicator was correct to identify the mistake as an “inadvertent slip” because he made a deduction which he had not intended to make. Such slips are often, to some extent, contributed to by information provided by the parties or the way in which that information is provided. I do not consider that this prevents an adjudicator from operating the slip rule if he concludes that what he has done is not what he intended. In this case both parties had provided the Adjudicator with similar figures. This is not a case of the Adjudicator givingeffect to second thoughts or intentions but of giving proper effect to his firstthoughts. 55. In those circumstances, the Adjudicator applied the slip rule to correct an accidental error and BAL has no real prospect of successfully defending ODD’s claim for sums due under corrected Decision 8A. On the basis that BAL has paid all other sums due on Decisions 8A and 9, ODD is therefore entitled to summary Judgment for£148,468.67 .” “If the parties are in dispute as to the obviousness (or otherwise) of the alleged ‘slip’, or the adjudicator does not accept that an error has been made, or does accept it but only some time after the publication of the decision, then it is thought that the approach in Bouygues will remain appropriate.” “if… [the arbitrator] applies the correct remedy, but does so in an incorrect way - for example by miscalculating the damages which the submission empowers him to award - then there is no excess of jurisdiction. An error, however gross, in the exercise of his powers does not take an arbitrator outside his jurisdiction and this is so whether his decision is on a matter of substance or procedure.” “…in deciding whether the adjudicator has decided the wrong question rather than given a wrong answer to the right question, the court should bear in mind that the speedy nature of the adjudication process means that mistakes will inevitably occur, and, in my view, it should guard against characterising a mistaken answer to an issue that lies within the scope of the reference as excess of jurisdiction.”
“In any case that Application [17] and the corresponding Payless Notice were superseded by Interim Application 18, and the related Payless Notice of the following month in which [the Claimant] says, no Key Date Damages were deducted.”