Ritchie Borthers (PWC) Ltd v David Phillp (Commercials) Ltd (Part II)

Any consent by the referring party under paragraph 19(1)(b) of the Scheme for Construction Contracts to an extension of the period for the adjudicator to reach his decision from 28 to 42 days had to be given before the expiry of the (initial) 28 days period
 
RITCHIE BROTHERS (PWC) LTD v DAVID PHILP (COMMERCIALS) LTD
 
Scotland, Inner House, Court of Session
Lord Justice Clerk and Lords Abernethy and Nimmo Smith
24 March 2005
 
The adjudicator made a decision in the contractor's favour. The employer resisted enforcement of the decision in the court proceedings brought by the contractor on the basis that the adjudicator reached his decision "late" for the purposes of paragraph 19 of the Scheme for Construction Contracts.
 
Paragraph 19(1) of the Scheme provided that the adjudicator was to reach his decision 28 days after the date of the referral notice (paragraph 19(1)(a)), 42 days after the date of the referral notice if the referring party so consented (paragraph 19(1)(b)) or such period exceeding 28 days after the referral notice as the parties might agree (paragraph 19(1)(c). Paragraph 19(2)(a) provided that where the adjudicator for any reason failed to reach his decision within the time limits set out at paragraph 19(1), any party could serve a fresh notice of referral on a new adjudicator.
 
Lord Justice Clerk and Lord Nimmo Smith in the majority of the Inner House of the Court of Session in Scotland upheld the employer's contention, thus overturning the decision at first instance in the Outer House. They held that any consent by the referring party under paragraph 19(1)(b) of the Scheme to an extension of the period for the adjudicator to reach his decision from 28 to 42 days had to be given before the expiry of the (initial) 28 days period. This was on the basis that paragraph 19 should be regarded as mandatory (and not directory) in effect. This interpretation reflected the natural meaning of paragraph 19(1)(a) in that it was simple and straightforward and provided a clear time limit that left all parties knowing where they stood thus with the sensible result that paragraph 19(2) only came into operation after the original adjudicator's jurisdiction had expired. If a speedy outcome was an objective, it was best achieved by adherence to strict time limits and if certainty was an objective, it was not achieved by leaving the parties in doubt as to where they stood after the expiry of the 28 days period.
 
Advice Note
Under the Scheme for Construction Contracts, the claimant must consent to an extension of the period for the adjudicator to reach his decision from 28 to 42 days before the expiry of the (initial) 28 days period.
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