DGT Steel & Cladding v Cubitt Building

The court's inherent jurisdiction should be exercised by granting a temporary stay of the court proceedings brought by the sub-contractor so that there could be a (second) adjudication of the dispute involving the sub-contractor's valuation claim brought in the court proceedings
 
DGT STEEL AND CLADDING LTD v CUBITT BUILDING AND INTERIORS LTD

Technology and Construction Court
His Honour Judge Peter Coulson QC
4 July 2007
 
The sub-contractor referred a dispute to adjudication. The dispute involved the operation of the sub-contract terms (and in particular the validity of the contractor's withholding notice) without consideration of the underlying merits of the sub-contractor's final account claim. The adjudicator decided in the contractor's favour and rejected the sub-contractor's claim in its entirety. The sub-contractor brought court proceedings which concerned the validity of the sub-contractor's valuation of its works and the deductions made by the contractor. The contractor applied for a temporary stay of the court proceedings on the basis that the sub-contractor's valuation claim should be adjudicated in the first instance in the light of the obligation to that effect in the sub-contract adjudication clause. The adjudication clause in the sub-contract provided that any dispute "shall" in the first instance be subject to adjudication in accordance with the Association of Independent Construction Adjudicators (AICA) Adjudication Rules and thereafter to the exclusive jurisdiction of the English courts.
 
Judge Coulson held that the court's inherent jurisdiction should be exercised by granting a temporary stay of the court proceedings brought by the sub-contractor so that there could be a (second) adjudication of the dispute involving the sub-contractor's claim for the valuation of its works which it had brought in the court proceedings. He came to this conclusion on the basis that the obligation to adjudicate in the sub-contract adjudication clause was mandatory (and not simply optional), that even if that obligation had been optional, it was nevertheless binding, that the dispute in the court proceedings had not previously been referred to adjudication and was substantially different from the dispute in the first adjudication and that there was an overwhelming case for the court's discretion to be exercised by granting a stay. This overwhelming case was on the basis that there was no good reason not to grant a stay, that all the matters relevant to the exercise of the court's discretion indicated strongly that the parties would be better off if this detailed valuation dispute was determined in adjudication, that a stay would support the adjudication process in accordance with the general purpose of the Construction Act by keeping the parties to their bargain and that a stay would comply with CPR rules 1.4 and 3.1.
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