Global menu

Our global pages

Close

The importance of complying with an adjudicator’s decision

  • United Kingdom
  • Construction and engineering
  • Litigation and dispute management

05-02-2018

This case revisits the court’s approach to the enforcement of an adjudicator’s decision in circumstances where other conflicting decisions have been obtained.

Facts:

Doosan entered into a sub-contract with Actavo for the provision of scaffolding, pipe work, steel work and minor painting work to an ethane tank at a project in Grangemouth, Scotland.

Works commenced and a dispute arose regarding an unpaid interim application for payment in respect of which Doosan had failed to issue a payment notice or pay less notice. Actavo proceeded to adjudication and successfully obtained a decision for the sum of its application (£630,628.99 plus VAT) plus interest in accordance with Late Payment of Commercial Debts (Interest) Act 1998 (“the Act”). When Doosan failed to comply with the adjudicator’s decision it issued summary judgement proceedings to enforce the adjudicator’s decision.

At the same time, Doosan commenced a second adjudication in respect of the final account. The adjudicator in the second adjudication, following an assessment of the final account, held that the outstanding payment due to Actavo was £60,475.34. 

In light of the second decision, Doosan served a revised defence to the summary judgment proceedings which stated that:

(i)           the adjudicator had erred in his first decision in the application of interest; and

(ii)          the sum due to Actavo should be reduced by the second adjudicator’s decision.

It was Doosan’s case that the interest awarded by the adjudicator was contrary to a contractual arrangement established by a course of dealing. Doosan also issued part 8 proceedings in line with the arguments in its defence.

Decision:

O’Farrell J found that even if the first adjudicator had erred in his application of the Act, this matter fell within his jurisdiction and accordingly the decision can be enforced in full.

In dealing with the enforcement in the face of part 7 proceedings, the court upheld the guidelines set forth in Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC), namely that unless there was a breach of natural justice, then the decision of the adjudicator should be followed. 

It was held that the interest issue raised by Doosan could not be dealt with at a summary judgment application, this was because substantial evidence would be required.

Regarding the conflicting adjudication decisions, O’Farrell J emphasised the importance of complying with an adjudicator’s decision. O’Farrell J commented that where there are a number of simultaneous decisions, the court has to examine whether:

  • both decisions are valid;
  • whether both decisions can be enforced;
  • if both of them can be enforced, then they should both be given effect to;
  • but ultimately, it is at the court’s discretion how both decisions should be given effect to taking into account that the court can give precedence to the earlier decision reached. 

Practical implications:

The decision emphasises the importance of complying with an adjudicator’s decision, even where a second decision is obtained which is contradictory. The court’s decision supports the “pay now and argue later” approach. Parties should be mindful that it is expected to comply with an adjudicator’s decision pending the enforcement of another decision.

http://www.bailii.org/ew/cases/EWHC/TCC/2017/2849.html

For more information contact

< Go back

Print Friendly and PDF
Subscribe to e-briefings