Neutral citation: Transport for Greater Manchester v Kier Construction [2021] EWHC 804 (TCC)

NEC contract topics: Procedural compliance with Option W2 and clause 13

Form of contract: NEC3 Engineering and Construction Contract

Main areas of law: Adjudication procedure and the validity of a notice of dissatisfaction, communication and service of contractual notices, Jurisdiction of the court under CPR Part 8.

In 2015, Transport for Greater Manchester (TfGM) engaged Kier Construction Limited (Kier) under the NEC3 Engineering and Construction Contract, incorporating bespoke amendments for the design and construction of a bus interchange in Bolton. Option W2 governed adjudication. The Contract Data specified addresses for service.

Clause 13.2 provided that a communication takes effect when received at the “last address notified by the recipient” or the address stated in the Contract Data. Clause 13.7 required contractual notifications to be communicated separately from other correspondence. Under W2.4, a party dissatisfied with an adjudicator’s decision must issue a notice within four weeks, failing which the decision becomes final and binding.

In September 2019, Kier commenced adjudication seeking an extension of time and return of delay damages. The adjudicator ruled in Kier’s favour on 25 November 2019, awarding an extension and £598,775.42 plus interest. TfGM paid the award but sent a letter dated 29 November asserting that the adjudicator had erred and confirming its intention to seek formal resolution. An email dated 3 December reiterated that the payment was made on a provisional basis and without prejudice.

In August 2020, TfGM issued a Part 8 claim challenging the adjudicator’s decision. Kier applied to strike out the claim on the basis that TfGM had failed to issue a valid notice of dissatisfaction within the required timeframe.

The court was required to determine whether the 29 November 2019 letter constituted a valid notice of dissatisfaction under the contract. Kier advanced three arguments:

• The letter was not served at the correct address in accordance with Clause 13.2.

• It did not comply with Clause 13.7, being combined with other content.

• It lacked sufficient clarity under W2.3(11) to constitute a valid notice.

TfGM argued that service at the address of Kier’s solicitors, Walker Morris, was valid. That address had been used and accepted during the course of the adjudication. Additionally, the letter clearly expressed dissatisfaction with the adjudicator’s decision and a desire to challenge it.

 

Mrs Justice O’Farrell dismissed Kier’s application. The court held that the address of Kier’s legal representatives, Walker Morris, had become the last notified address under Clause 13.2 due to its consistent use during the adjudication. Service to that address was compliant. The court was satisfied that the requirement for notices to be separate under clause 13.7 had not been breached. The letter was a brief, discrete communication arising directly from the adjudicator’s decision. The judge found no requirement for specific legal formulations in the notice. The content of the 29 November letter was sufficient to convey dissatisfaction and an intent to refer the matter to a tribunal. The 3 December communication reinforced this position, though it was not necessary to rely on it. Accordingly, TfGM had issued a valid notice of dissatisfaction. The adjudicator’s decision did not become final and binding, and Kier’s application was dismissed.

 

This case confirms that procedural compliance under NEC contracts must be assessed in light of the parties’ conduct. Clause 13.2 permits the address for service to be updated by conduct. Where solicitors’ addresses are adopted during adjudication, communications served on those addresses can be valid. The decision also clarifies the requirements for a valid notice of dissatisfaction. A formal or detailed legal objection is unnecessary. The notice must clearly and unambiguously convey dissatisfaction and the intent to refer the dispute for further resolution. The ruling indicates that courts will adopt a pragmatic approach to evaluating compliance, provided the substance of the contractual requirement is met. It nonetheless serves as a reminder of the consequences of failing to comply with final and binding provisions, particularly the strict time limits under W2.4.

 

Section WI 920 (the extranet communication provision) of the Works Information was also considered but was not determinative. WI 920 stated:

 

“All communications shall be undertaken using the project extranet ‘NEC3 Change Management Tool’, [provided by Conject (formerly BIW Technologies)].”

 

However, the court ultimately accepted that Walker Morris' details sufficed under clause 13.2 despite WI 920 not being followed by Kier in its original notice.

Legal and commercial practitioners should ensure that notices are clearly drafted, separately communicated, and served at the correct address, which may have evolved through conduct. Clarity and procedural discipline remain essential to preserving rights under NEC adjudication procedures.