Tally Wiejl (UK) Ltd v Pegram Shopfitters Ltd

Summary judgment should not be ordered to enforce the adjudicator's decision in favour of the contractor where there was a realistic possibility that no construction contract had been entered to with the result that the adjudicator did not have jurisdiction to make any decision
 
TALLY WIEJL (UK) LTD v PEGRAM SHOPFITTERS LTD

Court of Appeal
May and Hale LJJ and Hooper J
21 November 2003
 
 
An adjudicator was appointed under the Scheme for Construction Contracts. The employer objected to the adjudication being carried out in accordance with the Scheme on the basis of its primary contention that there was a contract and that that contract incorporated JCT PC 98 with the result that any adjudication had to conducted in accordance with the JCT Adjudication Procedure. The employer also contended in the alternative that there was no (written) construction contract within the meaning of the Construction Act 1996 with the result that the adjudicator had no jurisdiction at all. The contractor contended that there was a contract and that contract its own terms and conditions which did not satisfy the requirements under the Act with the result that the Scheme applied. The adjudicator conducted the adjudication in accordance with the Scheme and made a decision in favour of the contractor. The contractor brought court proceedings to enforce the decision and applied for summary judgment.
 
The Court of Appeal overturned the decision of Judge Thornton at first instance and held that summary judgment should not be ordered. The Court of Appeal held that there was a realistic possibility in the circumstances of the case that no construction contract had been entered to with the result that the adjudicator did not have jurisdiction to make any decision. Judge Thornton had been wrong to find that it was not clear cut or obvious which set of conditions had been incorporated into the contract but that there was a construction contract of some kind. 
 
Whilst the court should be vigilant to examine arguments of the kind advanced by the employer critically, there might be cases when legal principle had to prevail over the broad brush “pay now, argue later” policy of the Act. The circumstances of the instant case constituted a case where legal principle should prevail over such policy since once or other of the employer’s contentions as to the true contractual position might well be correct and those contentions were certainly not fanciful.
 
Advice Note
If there is a realistic possibility that a defendant’s challenge to the adjudicator’s jurisdiction will succeed, the court will not order summary judgment in favour of the claimant in court proceedings to enforce the decision.
 
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