Case Law Updates - July 2022

• Published date: 10 August 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Real Estate and Construction, Contracts and Commercial Law, Arbitration & Dispute Resolution, Construction & Planning, Landlord & Tenant - Leases
• Law Firm: Barton Legal
• Author: Barton Legal

The Metropolitan Borough Council of Sefton v Allenbuild Limited HT-2022-MAN-000013

Background

The parties engaged in an adjudication, in which the adjudicator found the Claimant was owed around '2,204,217.13 (on 17 January 2022). The Claimant applied to the Court to enforce the adjudicator's decision.

The Defendant applied to the Court to stay the enforcement proceedings, on the basis that section 9(4) of the Arbitration Act 1996 (which states that parties to an arbitration agreement can apply to the Court to stay proceedings, intended to allow the parties to arbitrate instead of litigate). The Defendant also referred to a notice of dissatisfaction which was issued soon after the adjudicator's decision.

Judgment

The Judge held that any clause in a Construction contract which restricts a party's right to refer a dispute 'at any time' will not be consistent with section 108(5) of the Housing Grants, Construction and Regeneration Act 1996 (as amended) and would be replaced by the applicable sections of the Scheme for Construction Contracts (or the CIC model procedure used for this particular contract).

The Judge held that, as a result of the solicitor's not raising an objection to the adjudicator's jurisdiction (or reserving a right to) during the adjudication (the object would have been based on the fact the adjudication was referred to under the Scheme and not the CIC model procedure) then they could not make such an objection to the adjudicator's jurisdiction after the adjudication had completed.

The Judge also held that the authorities state that a notice of dissatisfaction must make it clear what challenge it is making to the adjudicator's jurisdiction. A notice needs to specify that a valid jurisdictional challenge does exist.

The notice of dissatisfaction issued in this case did not make it clear that a challenge was being made to the validity of the adjudicator's decision.

The Judge held, in relation to whether or not a stay should be allowed under Section 9 of the Arbitration Act, that a stay will not be granted if the dispute does not fall within the remit of the arbitration provision.

Under the Scheme and the CIC adjudication procedure, a party is excluded from referring a challenge to an adjudicator's award to arbitration in respect of a number of specified disputes. The provisions make it clear that a matter will be finally determined either by litigation, arbitration or agreement. A Court should refuse a stay because the parties have agreed that a party is not allowed to dispute an adjudicator's decision via arbitration (as per paragraph 23 of the Scheme).

Mallino Development Limited v Essex Demolition...