Enforcement of Adjudication Decision   © Daniel Atkinson 1999

For over a year Statutory Adjudication (under the HGCR Act) has been available and in that time has radically altered the approach to resolving disputes in the UK construction industry. The landmark decision was by His Honour Mr Justice Dyson in Macob Civil Engineering Limited v Morrison Construction Ltd (1999) BLR 93. The decision established summary judgment by the courts as the means of enforcement of Adjudicator’s Decisions, thus ensuring the success of Statutory Adjudication.

One issue which has arisen quite frequently in practice is the question of the validity of the Adjudicator’s decision. In Macob it was held that a decision was not invalid simply because it was wrong, either because of an error on the facts or in law, or because of a procedural error. A remarkably robust decision.

What is the situation where the parties do not agree that the Adjudicator has jurisdiction to deal with the dispute? What if one party argues that the relevant agreement was entered into before 1^st May 1998, or that the relevant contract is not a construction contract for the purposes of Statutory Adjudication, or that the agreement is not in writing as required, or that the dispute falls within one of the exceptions to which Statutory Adjudication does not apply? Will the Courts still give summary judgment so readily?

A further issue is whether a party’s participation in an Adjudication, means he will be held to have submitted to the jurisdiction of the Adjudicator and be bound by the Adjudicator,’s Decision?

The recent decision by His Honour Mr Justice Dyson in The Project Consultancy Group v The Trustees of the Gray Trust (July 1999) TCC provides answers to some of these issues. In that case the issue was whether the contract had been entered into before 1^st May 1998.

It was held as a matter of statutory interpretation that a decision in respect of a contract which is not a construction contract at all, or which is a construction contract entered into before 1^st May 1998 is not a Statutory Adjudication decision and is not binding on the parties. It is open to a defendant in enforcement proceedings to challenge the decision of an adjudicator on the grounds that he was not empowered to make a Statutory Adjudicator’s Decision.

In order to succeed in Summary proceedings, it was held that the Defendant need only demonstrate that they have a real prospect of showing that the Adjudicator was wrong in holding that a contract was concluded after 1^st May 1998. In this case it was considered at least arguable that essential terms had not been agreed and that there was insufficient certainty of terms to support a contract. It was held that it was at least arguable that no contract was ever concluded. Since it was not possible to resolve these issues by summary process and without full evidence and argument the application for enforcement of the Adjudicator’s Decision by Summary Judgment was dismissed.

In deciding the issues, Mr Justice Dyson considered whether, by participating in the adjudication process, the defendants waived the jurisdiction point, and agreed to submit to abide by the decision of the Adjudicator on that issue. It was held that this was a question of fact. In this case the defendants had stated at the beginning that the Notice of Reference to Adjudication was invalid and that if the adjudication continued they would dispute the Adjudicator’s jurisdiction and put these issues before the Court in any enforcement proceedings. The defendant further stated that the defendant’s right to appear and present its case in the Adjudication was without prejudice to its position on jurisdiction. It was found that the defendant never departed from that position during the Adjudication and therefore did not submit to the jurisdiction of the Adjudicator.

The decision in The Project Consultancy Group shows that parties will need to consider carefully whether or not they consider the Adjudicator has jurisdiction and to make their position clear if they do not wish to be bound by his decision.

One further issue remains, which was raised but did not need to be dealt with in the above decision. What happens if the Adjudicator has dealt with the dispute referred to him, but for whatever reason has not dealt with a defence or a counterclaim? For instance there may be a defence of abatement because of defects in the work, or there may be a counterclaim which could be set-off against the claim. Will the Courts give Summary Judgment even in these situations, on the basis that these are matters which the payment provisions of the HGCR Act deal with? On the other hand will the Court decide that it would lead to injustice to give summary judgment when there is a real prospect of the claim being reduced or even extinguished by the defence or counterclaim?

In the above decision the question of abatement was raised but it was not necessary to deal with it to decide the application. We shall therefore need to wait and see the development of the law in this area.