Key takeaways
False statements can undermine adjudication
The court found that a reckless claim of conflict of interest could invalidate the adjudicator’s decision.
Courts expect transparency in nominations
RNJM’s failure to explain its claim led to serious legal consequences.
Jurisdiction depends on honest and fair conduct
This case highlights the risks of manipulating the adjudicator selection process.
Adjudication undone – The high cost of a potentially false statement
RNJM Limited -v- Purpose Social Homes Limited
In RNJM Limited -v- Purpose Social Homes Limited [2025] EWHC 2224, the Technology and Construction Court (TCC) considered how a potentially false statement on an adjudicator nomination form would impact the appointed adjudicator’s jurisdiction.
The facts
The salient facts of the matter were as follows:
RNJM Limited (“RNJM”) brought an application for summary judgment to enforce an adjudicator’s decision awarding it circa £130k.
This was the fifth adjudication by RNJM under the contract entered into by the parties.
The second, third and fourth adjudications between the parties had been dealt with by the same adjudicator, Mr Bunker.
In the third and fourth adjudications, Mr Bunker had found in favour of Purpose Social Homes Limited (“PSHL”) and directed for RNJM to pay his fees, which RNJM subsequently failed to pay.
In the fifth adjudication, in its application to the adjudicator nominating body (RICS), RNJM had stated that there was a conflict of interest with Mr Bunker due to a “dispute over payment”. On that basis it said Mr Bunker should not be appointed. RICS appointed Mr Wood.
In resisting the enforcement of the adjudicator’s award in the fifth adjudication, it was alleged by PSHL that there was a strong prima facie case that the statement of conflict of interest by RNJM was a deliberate or reckless false statement to seek an advantage.
PSHL said that would render the appointment of the fifth adjudication without jurisdiction and invalidated the entire process, thereby making the adjudicator’s decision a nullity.
The issues
The parties broadly agreed that the issue for the court was:
“Does the Defendant have a real prospect of successfully arguing that the Claimant either deliberately or recklessly made a false statement in the process of applying to the RICS for the appointment of an adjudicator for the fifth adjudication?”
The court was therefore required to consider:
What information was provided by RNJM to the adjudicator nominating body (RICS);
Was this information false; and
Was this false information given either deliberately or recklessly as to its truth.
The decision
On considering the evidence and submissions advanced by the parties, the court found that the evidence provided by RNJM was wholly inadequate to establish the nature and reason for asserting that there was an alleged dispute with Mr Bunker, noting specifically that:
The application form included nothing more than a bare assertion, and RNJM had not, at any stage, set out any adequate explanation as to why it asserted there was such a dispute;
RNJM had chosen not to answer any questions or provide any evidence about the nature of the alleged dispute, which the court said was telling; and
RNJM had subsequently failed to justify its “bald assertion” that steps taken by Mr Bunker to pursue payment of his fees gave rise to a genuine risk of apparent bias against it.
Accordingly, the court had no hesitation in refusing RNJM’s application for summary judgment, finding that PSHL had a realistic prospect of successfully arguing the various points it raised about the lack of jurisdiction of the adjudicator on the basis that the Claimant made a false statement about a conflict of interest on the nomination form.
Commentary
The courts support the adjudication process and only refuse enforcement in a minority of cases. Parties were warned in the earlier case of Eurocom Ltd -v- Siemens Plc [2014] EWHC 3710 (TCC) that care had to be taken when seeking nomination of an adjudicator. That makes sense. Adjudicators are tasked with making interim decision on matters that can be both complex and high value. The adjudication process requires there to be no question that one party has had an unmerited control over selection (or deselection) of any particular individual as adjudicator.
The case underscores the importance of the commencing the adjudication process correctly, and the impact on the adjudicator’s jurisdiction if the correct process is not followed. It also raises the thorny issued faced by responding party’s facing multiple adjudications from a referring party who does not satisfy orders for fees made against it. In this matter the first adjudication had not proceeded as the adjudicator resigned when RNJM did not pay the requested security for fees. Going forward we expect to see more adjudicators making security for fees as part of their terms and conditions. Many parties may support that approach.
