9 May 2019
THE HONG KONG INSTITUTE OF CONSTRUCTION ADJUDICATORS
2019 NEC4 ADJUDICATION RULES
1. GENERAL
1.1 These Rules are the Hong Kong Institute of Construction Adjudicators 2019 NEC4 Adjudication Rules for the application of NEC4 ECC Option W1 dispute resolution clause.
1.2 Either the Client or the Contractor may request the other Party to participate in an adjudication in accordance with these Rules as provided for in this Contract.
1.3 The Adjudicator nominating body is the Hong Kong Institute of Construction Adjudicators (“HKICAdj”) whose address is:-
Level 8, Cambridge House,
Taikoo Place,
979 King’s Road,
Island East,
Hong Kong
1.4 Words and expressions used in these Rules shall have the meaning assigned to them in NEC4 ECC.
1.5 All references to days and weeks refer to calendar days and weeks respectively, unless otherwise specified.
2. REFERRAL TO SENIOR REPRESENTATIVES
2.1 A statement of case submitted under W1.1(2) is limited to no more than ten sides of A4 paper together with supporting evidence of not more than twenty sides of A4 papers. The statement of case contains: -
2.1.1 a summary of the nature and background of the dispute;
2.1.2 relevant contractual provisions supporting the claim;
2.1.3 a statement of the relief sought; and
2.1.4 due date of the payment.
2.2 The Senior Representatives attend at least two meetings with the Parties and use any procedure they consider necessary to try to resolve the dispute over a period of no more than three weeks. The first meeting takes place within one week of receiving the statement of case and the Senior Representatives hear the response from each Party to the other Party’s statement of case. The second meeting takes place at least one week before the expiry of the three-weeks period as stipulated under W1.1(3).The Senior Representatives facilitate and advise, as they think fit, the Parties to explore and generate options to reach a resolution.
3. NOTICE OF ADJUDICATION
3.1 In accordance with W1.3(1), a Party disputing any issue not agreed by the Senior Representatives:
i) For any payment dispute including its time related issues, issue a notice of adjudication to the other Party (“the Referred Party”), copied to the Project Manager and HKICAdj within two weeks of the production of the list of agreed and not agreed issues, or when it should have been produced.
ii) For any dispute other than payment dispute including its time related issues, refer to the tribunal for settlement.
3.2 A notice of adjudication issued under W1.3(1)(i) shall contain: -
3.2.1 a list of the issues agreed and issues not agreed produced by the Senior Representatives;
3.2.2 a summary of the nature and background of the dispute;
3.2.3 a statement of the remedies sought;
3.2.4 copies of all documents which have an important and direct bearing on the issues;
4. THE APPOINTMENT OF THE ADJUDICATOR
4.1 The Adjudicator is the Adjudicator identified in the Contract Data Part One. The appointment procedures follow that stipulated under Clause W1.2.
4.2 If there is no Adjudicator identified in the Contract Data, the Parties jointly agree and appoint an Adjudicator within one week of the notice of adjudication under Clause W1.3(1) In the case where the Parties fail to agree an Adjudicator within one week of the notice of adjudication, either Party may request HKICAdj to appoint an Adjudicator. HKICAdj appoints an Adjudicator within one week of the request. The appointed Adjudicator becomes the Adjudicator.
4.3 The Parties agree with the Adjudicator the Adjudicator’s fees within one week upon the appointment made under Rule 4.2. If the Parties fail to agree, the Adjudicator’s fees shall be determined by HKICAdj.
4.4 The Adjudicator so appointed under Rule 4.2 and Rule 4.7 possesses the following qualifications:
4.3.1 A minimum of 8 years working experience in relation to the built environment;
4.3.2 A full member of one of the professional institutes (HKIA, HKIE, HKIS, HKILA, ICE, RICS, CIOB or equivalent);
4.3.3 Holder of a certificate in adjudication issued by HKICAdj; and
4.3.4 Any criteria served and agreed upon by the Parties.
4.5 Both Parties may agree and serve their criteria of nomination to HKICAdj within three days of the request to appoint an Adjudicator under Rule 4.2.
4.6 The Parties may, by agreement, terminate the appointment of the Adjudicator for any reason. They notify the Adjudicator of the termination.
4.7 The Parties may, by agreement, appoint any new Adjudicator jointly under the NEC Dispute Resolution Service Contract any time after the starting date. Upon the appointment of the new Adjudicator, the appointment of the previous Adjudicator, if any, is deemed terminated. The Parties record such new appointment in writing and copy to HKICAdj.
4.8 No person shall serve as an Adjudicator or a replacement Adjudicator in any dispute in which that person has any actual or potential, financial or personal interest in the result of the adjudication except in the event where all Parties agree.
4.9 All appointments are recorded in writing.
4.10 The costs incurred by HKICAdj in appointing a replacement Adjudicator shall be borne by all Parties in equal shares.
5. THE REFERRAL INFORMATION
5.1 Under W1.3(3), the referral information to be considered by the Adjudicator, copied to Referred Party, includes the following matters but exclude any matters not raised in the statement of claim submitted to the Senior Representatives:
5.1.1 The details of the dispute, the issues arising;
5.1.2 The amount claimed and due date for payment of amount claimed; and
5.1.3 Copies of all documents which have an important and direct bearing on the issues.
5.2 Under W1.3(3), any more information from a Party to be considered by the Adjudicator is served in the following manner:
5.2.1 The Referred Party may serve on the Referring Party a response to the referral information (“adjudication response”) within two weeks of the referral containing detailed submissions with supporting document in relation to the dispute. The adjudication response may include any counterclaim or setoff;
5.2.2 The Party receiving the adjudication response may serve on the referred Party a reply to the adjudication response (“adjudication reply”) within two weeks of receiving the adjudication response containing detailed submissions with supporting document in relation to the dispute.
6. COMMENCEMENT OF THE ADJUDICATION
6.1 Subject to the NEC Dispute Resolution Service Contract, the adjudication is deemed to commence on the date upon which: -
6.1.1 an Adjudicator is appointed under Rule 4.2; or
6.1.2 the Parties jointly choose a new adjudicator under Rule 4.7
7. POWERS OF THE ADJUDICATOR
7.1 In addition to W1.3(5) and without prejudice to the generality of W1.3(5), 4th bullet point, the Adjudicator shall have power:-
7.1.1 to examine any witness or conduct an inspection of any property or thing relevant to the dispute in the absence of any other representative of the Parties or any other person,
7.1.2 at any time to permit any Party to amend any submissions,
7.1.3 to ask for further written submissions from either Party and must give the other Party an opportunity to comment on the submissions,
7.1.4 to take samples, conduct experiments and site visits as may be necessary for the purpose of reaching a decision,
7.1.5 to make use of the Adjudicator’s own specialist knowledge in reaching a decision, subject to the comments from the Parties,
7.1.6 to any decision the Adjudicator’s own jurisdiction,
7.1.7 to meet and question any Party or representative or witness,
7.1.8 to conduct any hearing and limiting the hearing time only if any Party makes a written request to the Adjudicator,
7.1.9 to establish procedures in conducting the hearing including limiting the submission of document by the Parties,
7.1.10 to appoint independent experts to inquire and report on specific matters with the consent of both Parties,
7.2 Without prejudice to any powers conferred upon the Adjudicator, the Adjudicator acts fairly and to avoid unnecessary delay and expense in the adjudication.
7.3 For the avoidance of doubt, nothing in these Rules shall be taken as conferring power upon the Adjudicator to order a Party or a Party’s representative to give evidence (whether in person or by way of documentary or similar evidence) which could not be ordered if the proceedings were before the High Court of Hong Kong SAR.
8. PROCEDURES
8.1 The Adjudicator has the widest discretion permitted by these Rules and Hong Kong law to determine the procedures of the adjudication and to ensure the just, expeditious and economical decision of the dispute after such investigation as the Adjudicator may think fit provided that he/she shall adopt all and any procedures agreed by the Parties to be appropriate for deciding the dispute.
8.2 Without prejudice to the generality of Rule 8.1, the Adjudicator only convenes a hearing upon a written request from any Party, or otherwise takes oral evidence or proceeds to decide the dispute on a document-only basis subject to the rights of the Parties to make representations to the Adjudicator in relation to the dispute.
8.3 The Adjudicator fixes the date, time and place of any meetings, hearings, or inspections which the Adjudicator deems appropriate, and shall give the Parties notice within reasonable time.
8.4 The Adjudicator may in advance of any meeting or hearing submit to the Parties a list of questions which he/she wishes the Parties to treat with special attention.
8.5 All meetings, hearings or inspections shall be in private with the presence of all Parties, unless the Parties agree otherwise.
8.6 The Parties may be represented by a maximum of two persons as agreed by the Adjudicator. These representatives possess architectural, engineering, surveying or construction background. The Parties inform the Adjudicator and the other Party the names and addresses of the individuals who represent them at the meetings, hearings, or inspections seven days prior to the commencement of such meetings, hearings or inspections
9. WITNESSES
9.1 Before any hearing, the Adjudicator may require a Party to give notice of the identity and qualifications of witnesses it wishes to call and may require the Parties to exchange statements of evidence to be given by the witnesses at a specified time in advance of the hearing.
9.2 Subject to Rule 7.2, the Adjudicator may allow, refuse or limit the appearance of witnesses, whether witnesses of fact or expert witnesses.
9.3 Unless otherwise agreed by the Parties, not more than two expert witnesses may be called.
9.4 Any witness who gives oral evidence at a hearing may be questioned by each of the Parties or their representatives in the presence of the Adjudicator. The Adjudicator may put questions at any stage of the examination of a witness.
9.5 The Adjudicator may allow the evidence of a witness to be presented in written form either as a signed statement or by a duly sworn affidavit or affirmation. Any Party may make representations that such a witness should attend the oral examination at a hearing. If the Adjudicator so orders, and if the witness fails to attend, the Adjudicator may place such weight on the written evidence as he/she thinks fit or exclude it altogether.
10. DECISIONS
10.1 The Adjudicator makes his decision in writing for each dispute referred to him and in such decision: -
10.1.1.1 state the dispute referred to him;
10.1.1.2 state the reasons for the decision;
10.1.1.3 record any admissions (not otherwise recorded in writing) made by either Party during the course of the adjudication.
10.2 The Adjudicator may order that interest be paid, subject to and in accordance with this Contract or otherwise at his discretion.
11. COSTS
11.1 Payments as to cost under this section are in the Hong Kong Dollars.
11.2 If an advanced payment is not stated in the Contract Data, each Party within five days of the commencement of adjudication under Rule 6.1 deposits the sum of HK$30,000 with HKICAdj as a payment on account of the cost and proper expenses of the Adjudicator. The sum of $30,000 is subject to annual review and adjustment by HKICAdj.
11.3 The Adjudicator may at any time during the course of the adjudication require the Parties to make further advanced payments to him to cover his reasonable costs. The Adjudicator issues an invoice to the Parties. The Parties make the further advanced payment to the Adjudicator within one week of the Adjudicator’s invoice in equal shares.
11.4 The Adjudicator shall specify in his decision the total amount of his fees and expenses, including the charges of any expert witness, transcriber or translator. Unless the Parties agree otherwise after the dispute has arisen, the Adjudicator decides the proportions in which the Parties pay such fees and expenses, provided that the Parties will be jointly and severally liable to the Adjudicator for payment of all such fees and expenses until they have been paid in full. If the Adjudicator has decided that all or any of his fees and expenses shall be paid by any Party or Parties other than a Party which has already paid the Adjudicator, the latter Party shall have the right to recover the appropriate amount from the former.
11.5 Unless the Parties agree otherwise after the dispute has arisen, the Adjudicator may order in his decision that all or part of the legal or other costs of one Party reasonable in amount and reasonably incurred shall be paid by the other Party. The Adjudicator also has power to assess these costs and may do so if requested by the Parties.
11.6 If the adjudication is abandoned, suspended or concluded, by agreement or otherwise, before the Adjudicator’s decision is made, the Parties are jointly and severally liable to pay to the Adjudicator his fees and expenses including the charges of HKICAdj and any expert witness, transcriber or translator as decided by him.
11.7 At the conclusion of the adjudication, HKICAdj deducts the amount due from the sum deposited under Rule 11.2 and returns any surplus to the Parties.
12. CONFIDENTIALITY
12.1 The adjudication process including the documents and communication therein involved confidential between the Parties and the Adjudicator. No information relating to the adjudication process shall be disclosed by any Party without the written consent of the Parties of the adjudication.
13. ADJUDICATOR NOT TO ACT AS MEMBER OF TRIBUNAL
13.1 The Adjudicator shall not act as a member of the tribunal unless the Parties agree otherwise in writing.
14. LANGUAGE
14.1 The language of adjudication is English and all written communications and all hearings shall be conducted in the English language unless the Parties and the Adjudicator agree otherwise.
15. PLACE OF ADJUDICATION
15.1 The place of adjudication shall be the Hong Kong Special Administrative Region.
16. SERVICE OF NOTICE AND DOCUMENTS
16.1 Service of a notice or any other document under these Rules shall be effected on the Party to be served: -
16.1.1 by delivering the notice or document personally to the Party; or
16.1.2 by leaving the notice or document at the usual place of business of the Party during the normal business hours of that Party; or
16.1.3 by sending the notice or document to the usual or last-known place of business of the Party by registered post; or
16.1.4 by any other electronic means as agreed in writing by the Parties.
16.2 For the purpose of serving notices, documents and making a decision under these Rules:-
16.2.1 a day does not include: -
16.2.1.1 a Saturday or Sunday; or
16.2.1.2 a public holiday of Hong Kong; or
16.2.1.2.1 any day within the period of 24 December to 31 December, the Chinese New Year and the immediate seven calendar days following it.
17. THE TRIBUNAL
17.1 W1.4 does not apply to any dispute other than payment dispute including its time related issues referred in Rule 3.1(ii).
17.2 For any dispute other than payment dispute including its time related issues, the tribunal has the powers to review and revise any action or inaction of the Project Manager or the Supervisor related to the dispute other than payment dispute including its time related issues. If the tribunal is arbitration, the arbitration procedure, the place where the arbitration is to be held and the method of choosing the arbitrator are those stated in the Contract Data.
