Stiell Ltd v Riema Control Systems Ltd
The contractor's application to recall the monies arrested (deposited) in court after the adjudicator had ordered the contractor to pay to the sub-contractor a proportion of the total sum claimed (which it did) should be rejected
23 June, 2000
-The sub-contractor claimed sums in court proceedings against the contractor. An agreed amount was arrested by being deposited in court under Scottish court procedure. Prior to the court proceedings in which the arrestment was made, the sub-contractor had referred a dispute to adjudication. The dispute was the same as that in the court proceedings. The adjudicator ordered that only a part of its total claim should be paid to the sub-contractor, which the contractor did. The amount arrested in court was reduced by agreement but the contractor subsequently applied for the arrestment to be recalled in its totality. Lord Prosser held that the contractor's application should be rejected notwithstanding that the sub-contractor's claim in the adjudication proceedings had been for the total value of its works and that the sub-contractor had made the same claim in the court proceedings in which the monies were arrested. The debt which existed at the commencement of the court proceedings was "pure" and not "contingent" (under Scottish law). The facts that an issue in court proceedings might be required to be determined by arbitration or adjudication proceedings and that, as in the instant case, the determination by an adjudicator was only binding until final determination by the court or by agreement did not mean that there was any change in the issue to be determined or that claims which were "pure" had become "contingent." In addition the contractor's contention that the arrestment was nimious and oppressive on the ground that the sub-contractor's claim in the court proceedings was prima facie excessive or extravagant in the light of the adjudicator's decision that the sub-contractor should only be awarded part of its claim should be rejected. There was no suggestion that the sub-contractor's claim was made with anything other than a proper motive and on a normal basis. Also there was nothing unusual in arrestments remaining in place despite a view having been taken that the claim was bad in part or in whole. Advice Note The mere fact that an adjudicator awards only a (small) part of the overall claim does not mean that the courts will regard the (majority of the) claim as having been without merits for the purposes of the (separate) court proceedings.