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No-nonsense back-up of adjudicators' decisions

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legal matters

In Macob Civil Engineering v Morrison Construction (aj 8.4.99), Dyson decided that a challenge to an adjudicator's decision did not prevent it from being binding and enforceable. The question of enforcement has always been believed to be the main shortcoming of the new process - the hgcr Act does not explain how those reckless enough to ignore the adjudicator's ruling should be brought to book. When the scheme was introduced it invoked a convoluted procedure involving Section 42 of the Arbitration Act. The tried-and-tested route for debt recovery - of summary judgment in the courts - was thought by many to be unworkable because disputes arising out of contracts with arbitration clauses would be automatically stayed for arbitration. Some sort of summary relief under the new Arbitration Act or an injunction from the court was thought by many to be the most likely way to ensure that the adjudicator's will would be done.

The problem was considered by the judge in the Macob case. He upheld the provisions of the Scheme (and Section 42 of the Arbitration Act) and went on to find that summary judgment was appropriate despite the provisional nature of an adjudicator's decision. He said: 'The grant of summary judgment does not pre-empt any later decision that an arbitrator may make. It merely reflects the fact that there is no defence to a claim to enforce the decision of the adjudicator at the time of judgment.'

He said that a 'mandatory injunction' (a court order requiring particular action with the sanction of contempt proceedings in the event of non-compliance) was not appropriate where the adjudicator's decision was simply that money should be paid by one contracting party to another. If the adjudicator decided that a party should perform some other obligation such as returning to site to open up work for inspection or to carry out specific works, then the court could grant an injunction. So in Macob the judge found that the successful party was entitled to summary judgment. This may not have assisted them at the time because they had not asked for it, although no doubt they subsequently remedied that oversight.

Hot on the heels of Macob, HHJ Humphrey Lloyd qc decided Outwing Construction Ltd v H Randell & Son Ltd (15.3.99). The adjudicator, Peter Talbot, appointed by the Chartered Institute of Building, gave a decision in favour of the ground-worker, Outwing, for payment of the outstanding balance of the agreed final account, his fees and the nomination fee. Outwing issued an invoice for the total sum of £16,000 odd. When the contractor, Randell, failed to pay up, Outwing, taking its lead from Dyson, commenced court proceedings for summary judgment with an expedited hearing.

At 11.00 on the morning of the hearing, Randell paid up. Outwing then claimed its costs of the court proceedings. Randell argued that, in effect the ground-workers had pressed ahead with the court action too speedily, that they were entitled to the time allowed by the courts for payment of debts and that, as they paid up in the end, the proceedings were unnecessary.

Outwing maintained that there was every reason for pushing ahead with the enforcement proceedings, otherwise Parliament would be defeated in its intention that adjudication be swift and effective. Judge Lloyd agreed, saying: 'Action to enforce an adjudicator's decision is not comparable to the ordinary process of recovering an apparently undisputed debt . . . Parliament intended that adjudicators' decisions and orders, if not complied with, are to be enforced without delay.'

Macob and Outwing have set the scene for no-nonsense back-up of adjudicators' decisions by the courts.

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