A V B

The decision awarding the sub-contractor a specified sum should be enforced on the basis that neither the sub-contract terms nor the ORSA Adjudication Rules prohibited enforcement proceedings until either the actual completion date of the last phase of the main contract or the termination of the sub-contract
 
A v B

Scotland, Court of Session, Outer House
Lord Drummond Young
17 December 2002
 

The adjudicator in her decision awarded the sub-contractor an extension of time and associated loss and expense in a specified sum. The sub-contractor began court proceedings against the contractor to enforce the decision by way of summary judgment. The contractor opposed enforcement on the ground that the terms of the sub-contract and of the ORSA Adjudication Rules incorporated into the sub-contract in effect prohibited the sub-contractor from bringing court enforcement proceedings until either the actual completion date of the last phase of the main contract or the termination of the sub-contract (neither of which had occurred).

 

The contractor relied on the sub-contract provision that no party was to make any application to the court in relation to the adjudicator’s decision until the earlier of the actual completion date of the last phase or the termination of the sub-contract. However, Rule 14, like section 108(3) the Housing Grants, Construction and Regeneration Act 1996, provided that adjudicators’ decisions were binding until the dispute was finally determined by court or arbitration proceedings or by agreement. Rule 28A provided that every adjudicator’s decision was to be implemented without delay and that the parties were entitled to its summary enforcement regardless of whether the decision was the subject of challenge or review. Rule 33 provided that no party was to make any application to the courts in relation to the conduct of the adjudication or the adjudicator’s decision until the decision had been complied with.

 

Lord Drummond Young held that the true construction of the sub-contract in the light of section 108(3) was that it only related to judicial review of an adjudicator’s decision (and not to proceedings to enforce a decision) insofar as the adjudicator’s conduct could be challenged in that manner and it was open to the parties to allow proceedings for judicial review to be delayed until the contract’s conclusion provided that immediate enforcement was available. This conclusion was also supported by the provisions of Rule 28A.

 

Advice Note

The courts will in all probability strike down any contractual provision that a decision cannot be enforced until the occurrence of a particular event. This is because any such provision would contradict section 108(3) of the Construction Act 1996.
 

Download