SUPPLEMENTAL AGREEMENTS, CONSTRUCTION CONTRACTS AND ADJUDICATION

McConnell Dowell Constructors (Aust) Pty Ltd v National Grid Gas plc (formerly Transco plc) [2006] EWHC 2551 (TCC), 3 October 2006

In McConnell Dowell Constructors (Aust) Pty Ltd v National Grid Gas plc (formerly Transco plc) [2006] EWHC 2551 (TCC), 3 October 2006, Mr Justice Jackson held that a supplemental agreement concluded between the parties was a variation of the original contract between the same parties so that the adjudication provisions contained in the original contract continued to be operative between the parties. It followed from this that the adjudicator did have jurisdiction to decide matters concerned with the scope of the supplemental agreement. A different conclusion would have been reached had the supplemental agreement been a stand-alone contract which displaced the original contract. The distinction between variation and displacement may not always be easy to draw but it would appear from the present case that a court is more likely to find that a supplemental agreement is a variation of the original contract unless the supplemental agreement is clearly a stand-alone contract which is separate and distinct from the original contract or it seeks to resolve all disputes arising out of the original contract so that there is nothing left to be resolved under the original contract.