ZVI Construction Co LLC v The University of Notre Dame (USA) In England [2016] EWHC 1924 (TCC)

In this case the Court considered an expert determination clause. The Claimant construction company contracted with the Defendant employer under a Duty of Care agreement and a Development Agreement to carry out design and construction to Conway Hall in South London. The seller of the Hall was also a party to the Development Agreement and the sale of the Hall was conditional on the Claimant completing the building works. The Development Agreement contained a dispute resolution procedure at clause 17.1 which provided for the resolution of disputes by an expert. In 2014 the Defendant alleged that the works were defective and referred the issue to the expert determination procedure. The solicitors representing both the Claimant and the seller served submissions on behalf of both parties denying breach of contract. The letter did not dispute the jurisdiction of the expert. The Claimant lost and took steps to resist the determination. The Defendant contended that the Claimant had waived its right to object to the expert determination process and/or was estopped from doing the same and/or there was an implied agreement to this effect. The Court held that a party to a contract containing a clause providing for disputes to be decided by an expert can expressly or impliedly, by words or conduct, confer jurisdiction to such expert where otherwise there would be none. Here, there was a course of conduct arising out of the Claimant’s active participation through correspondence and submissions in the expert determination through which the Claimant impliedly agreed that the expert would have jurisdiction. The Claimant’s conduct evidencing its understanding that the dispute was capable of resolution by the expert crossed the line and was communicated to the Defendant during the course of the expert determination process and became a common assumption which the Defendant relied on to its detriment. Further, the Claimant’s conduct could only be understood as impliedly agreeing to submit the dispute for decision by the expert and the non-waiver clause of the Development Agreement did not preclude the Defendant from relying on the implied agreement or the estoppel or waiver