Those who are unfortunate enough to find themselves subject to either arbitration or adjudication proceedings know that it is far too easy to give the arbitrator/adjudicator jurisdiction to determine the dispute, even though he may not originally have had jurisdiction at the outset.  A defendant can give the arbitrator/adjudicator jurisdiction if he takes part in the process without reserving his rights, even though the arbitrator/adjudicator did not have jurisdiction.

To protect a defendant’s position, it was thought that a general and catch all reservation would suffice if he took part in the process but subsequently chose to challenge the decision on the basis that the arbitrator/adjudicator lacked jurisdiction to determine the dispute.

However, last year in Allied P&L Limited v Paradigm Housing Group Limited [2009] EWHC 2890 (TCC), the court cast some doubt on whether a general reservation would suffice, but did not specifically decide the point.  The point has now been decided in GPS Marine Contractors Limited V Ringway Infrastructure Services Limited [2010] EWHC 283 (TCC).

The court in GPS considered that a general reservation was effective but noted the problems caused by such a reservation.  A general reservation does not allow the party bringing the claim the opportunity to reconsider its position.  In addition, the arbitrator/adjudicator cannot investigate the merits of the objection and make an informed decision as to whether to proceed.

However, from a defendant’s perspective, as soon as he considers there may be a jurisdictional challenge (or may in fact wish to protect its position in any event), he should write to the arbitrator/adjudicator stating that he does not believe that the arbitrator/adjudicator has any jurisdiction to determine the dispute and that all his rights are reserved in full in that regard.  The defendant should go on to state that his participation in the process is strictly without prejudice to his right to challenge any decision made and that no act or omission by him shall constitute a waiver or estoppel of any rights which he has.  It is sensible to expressly state that he does not agree to the arbitrator/adjudicator having jurisdiction or to make any binding decision as to his jurisdiction.  It is also good practice to state in all further correspondence and documentation created for the proceedings, that they are “without prejudice to any jurisdictional challenge”.

In reserving his rights at the outset in the widest possible terms, a defendant should retain the right to contest the validity of the decision, in the event that it goes against him on the merits.

Finally, if there is a possibility of a jurisdictional challenge, make sure that at the very outset you play the card setting out your wide and general reservation of rights.  If you don’t use it, you will lose it.

For more information on these issues please contact

James Levy

or your usual Lewis Silkin contact