Midland Expressway Ltd v Carillion Construction Ltd (Part I)

The employer was not entitled to declarations and injunctions preventing the contractor from immediately referring to adjudication the dispute in respect of its interim payment claim

Technology and Construction Court
Jackson J
24 November 2005
The Secretary of State for Transport entered into a concession agreement with the employer whereby the employer was granted the right to design, construct and operate a toll road. The employer entered into a contract with the contractor for the design and construction of the road. The contractor submitted a disputed claim for an interim payment arising from a change required by the Secretary of State under the concession agreement which the employer instructed the contractor to carry out under the contract.
Clause 7.4.1 of the contract provided that pending the determination, agreement or resolution of any equivalent project relief under the concession agreement, the contractor was to take no steps to enforce any right, benefit or relief under the contract to the extent that it related to the same circumstances as those to which the project relevant event to which that equivalent project relief related. Section 11.3.3 of appendix 6 provided that the contractor was not to take any steps to enforce any of its contractual rights which might prejudice or be inconsistent with the operation of the dispute resolution procedure under the concession agreement.
The employer applied to the court for declarations and injunctions to prevent the contractor from immediately referring the dispute in respect of its interim payment claim to adjudication. The employer contended that clause 7.4.1 and section 11.3.3 expressly debarred the contractor from pursuing its claim in respect of the evaluation of a change required by the Ministry of Transport before that value had been determined by the dispute resolution procedure under the concession agreement.
Jackson J refused to grant the declarations and injunctions sought. In the judge's view neither clause 7.4.1 nor section 11.3.3 prevented the contractor from immediately pursuing its claim in adjudication. Both provisions were contrary to section 108(2) of the Construction Act to the extent that they purported to fetter the contractor's statutory right to an immediate adjudication with the results that they (1) had to be construed narrowly and in a manner which was compatible with the Act so as not to deprive the contractor of its entitlement to an adjudication at any time or (2) the contractual provisions for adjudication fell away and the Scheme for Construction Contracts, which conferred the right on the contractor to go to adjudication at any time, was substituted.