Legal News

    High Court Orders Summary Enforcement of £22 Million Adjudication Award

    Judges take a robust approach to enforcing contract adjudicators' decisions and will only overturn them if they have been made in excess of jurisdiction or in serious breach of the rules of natural justice. The High Court made that point in a case concerning a benighted project to upgrade a water treatment works.

    A joint venture (JV) between specialist engineering and construction companies was engaged to carry out the works by a water undertaker. Disputes concerning cost overruns, delays and quality issues arose and the undertaker ultimately terminated the contract. The matter was referred to an independent adjudicator who directed the JV to pay the undertaker £22,458,540, plus interest.

    The undertaker launched proceedings with a view to enforcing that award. Having given notice of its dissatisfaction with aspects of the adjudicator's decision, however, the JV asserted a contractual entitlement to refer any dispute arising from its non-payment of the award to an arbitration tribunal. It argued that it was under no obligation to satisfy the award prior to the tribunal's determination.

    Ruling on the matter, the Court noted that the adjudicator's decision was expressed as final and required the JV to satisfy the award within seven days. The JV had not raised any jurisdictional challenges prior to or during the adjudication and had fully participated in the procedure. Its acceptance of parts of the adjudicator's decision implied that it also accepted the underlying validity of his decision.

    The Court noted that judges will generally enforce an adjudicator's award, regardless of errors of procedure, fact or law, unless the adjudicator has acted without jurisdiction or in serious breach of natural justice. It concluded that the adjudicator's decision was binding, unless or until revised in arbitration, and was enforceable as a matter of contractual obligation.

    The JV's application for a stay of the enforcement proceedings under Section 9 of the Arbitration Act 1996 was rejected. The Court concluded that it had no defence to the undertaker's claim and that the undertaker was thus entitled to summary judgment in the full amount of the adjudicator's award.

    For further information please call one of our experts on: