Petition of Edinburgh Royal Joint Venture
Scotland, Outer House, Court of Session
TG Coutts QC
2 August 2002
The adjudicator made a decision in the respondent’s favour by awarding it an extension of time and associated loss and expense. The respondent applied to the court for the registration of the decision for enforcement purposes under the contractual provision providing for such registration. The petitioner in opposing the registration issued a petition. Its essence was founded on the contractual provision (paragraph (f)) that no party was to make any court application in relation to the adjudication’s conduct or the decision until the earlier of the actual completion date of the last phase or the sub-contract’s termination without both parties’ prior written consent
TG Coutts QC held that the petition on the basis that the petitioner’s refusal to consent to the registration of the decision showed irrebuttably that the issuing of the petition was an attempt to obtain an illegitimate deferral of the payment of the adjudicator’s award. Paragraph (f) failed to take into account the contractual provision permitting decisions to be registered, did not bar any (other) contractual provision for the enforcement of (as opposed to challenges to) decisions and was not a stand alone provision. It could therefore not prevent the enforcement of the decision to which the respondent was entitled both contractually and under the Construction Act 1996.
Whilst the petitioner sought to retain or counterclaim sums which it alleged were due by way of liquidated damages, the contract provided that no party was entitled to raise any set-off or abatement in connection with any enforcement proceedings. Paragraph (f) and the fact that the adjudicator declined to award the respondent the extension of time it sought did not mean that all disputes were postponed and that sums were due by way of (liquidated) damages for delay. This was because it was an inevitable consequence of adjudication that monies paid as a result of a decision might be found not to have been due or prove to be irrecoverable. Whilst the fact that there could be no set-off against the decision might ultimately lead to inequity, this was what was compelled by both the statutory scheme and the contract.
The courts will strain against an interpretation of prima facie contradictory contractual terms which purports to prevent a claimant from enforcing an adjudicator’s decision.