Castle Inns (Stirling) Ltd v Clark Contracts Ltd

That adjudicator's finding that the employer should pay all his fee and expenses could not be reconsidered and was not susceptible of challenge in any subsequent court proceedings where the contract incorporated the JCT standard form of Scottish Building Contract
 
CASTLE INNS (STIRLING) LTD v CLARK CONTRACTS LTD
Scotland, Outer House, Court of Session

Lord Drummond Young
29 December 2005
 
The contract incorporated the JCT standard form of Scottish building contract. Clause 41A.7.1 provides that (1) the adjudicator must state how payment of his fee and reasonable expenses is to be apportioned as between the parties and (2) in default of such statement the parties are to bear the cost of the adjudicator's fee and reasonable expenses in equal proportion. Disputes arose between the employer and the contractor which were referred to adjudication. The adjudicator found in the contractor's favour and ordered the employer to pay all his fee and expenses. The employer brought court proceedings and contended that the adjudicator's finding in his decision should be reconsidered in the event of the court or an arbitrator coming to a different decision to that of the adjudicator and ordering the claimant to repay sums which the adjudicator had ordered the defendant to pay to the claimant.
 
Lord Drummond Young rejected this contention. He held that the true construction of clause 41A.7.1 was that any such finding by the adjudicator did not relate to the dispute which was the subject of adjudication (and was instead merely an ancillary finding) and that such a reconsideration would be contrary to the contractual scheme in clause 41A. In particular he stated that court proceedings brought to enforce the parties' contractual rights (1) did not involve any reconsideration of the adjudicator's decision but were entirely free-standing (and the side note to clause 41A.8.1 to this effect was an accurate statement of the legal position) and (2) had the effect that if the court's decision on the dispute was at variance with the adjudicator's decision, any sums paid pursuant to the adjudicator's decision clearly had to be repaid. Such a reconsideration would be contrary to the contractual scheme in clause 41A insofar as there was no contractual mechanism in clause 41A which would allow such a reconsideration. In this connection (1) the power in clause 41A.7.1 for the adjudicator to state how payment of his fee and reasonable expenses was to be apportioned was specifically conferred on the adjudicator and (2) no appeal was possible against an adjudicator's decision and it could not be challenged on the ground that it was wrong on the facts or in law.
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