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Adjudication Matters December 2018: Festive Edition – Part 2

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18/12/2018

Welcome to Part 2 of the festive edition of Adjudication Matters.

The results are in!

Thank you to everyone for taking part. We will contact the winner direct regarding your prize which we hope you enjoy over the Christmas period!

Below are the correct answers to our Christmas Quiz – use the hyperlinks to take you to the source of the answer in one of our 2018 publications.

Merry Christmas!

Answers

1.  A ten-minute conversation in a bus shelter can form the basis of a valid oral contract for the purposes of adjudication. True or false? (1 mark)

True. This was established in Dacy Building Services Ltd v IDM Properties LLP [2018] EWHC 178 (TCC).

 See here.

2. What is a “smash and grab” adjudication? (2 marks)

The party seeking payment can automatically obtain an adjudicator’s decision for the amount stated in its interim application, even if the amount claimed did not reflect the true value of the works carried out. As a result, the paying party would be unable to dispute the true value of the interim payment, and any payment over and above the true value could not be rectified until a subsequent interim certificate or on the final account (which could be many months later).

See here.

3. Can a company in liquidation commence adjudication proceedings? (1 mark)

No. Michael J Lonsdale (Electrical) Limited v Bresco Electrical Services Limited (In Liquidation) [2018] EWHC 2043 (TCC) makes clear that a company in liquidation cannot refer a dispute to adjudication when that dispute includes (whether in whole or in part) determination of any claim for further sums said to be due to the referring party from the responding party.

See here.

4. Which Act of Parliament allows companies to issue adjudication proceedings by email, provided certain criteria are met? (1 mark)

Arbitration Act 1996.

See here.

5. What must a losing party do before they can adjudicate for the “true value” of an interim payment following a “smash and grab” style adjudication? (1 marks)

The party must have paid the amount decided in the initial “smash and grab” adjudication.

See here

6. It is likely that a right of set-off will apply to an Adjudicator’s decision. True or false? (1 mark)

The party must have paid the amount decided in the initial “smash and grab” adjudication.

False. It was re-affirmed in the Courts this year that even where there is an express right to set-off, a party will only be entitled to set-off another claim against an Adjudicator’s award in exceptional circumstances.

See here.

7. In Equitix ESI CHP (Wrexham) Ltd v Bester Generacion UK Ltd, what did Coulson J conclude regarding excluded operations? (2 marks)

Coulson J noted that the milestone payments in this matter all related to preparatory works. The work that had been carried out did not include any excluded operations. Rather than look at the works to be performed under the Contract as a whole, he decided the correct approach was to look at what the dispute itself related to.  No ‘excluded operations’ had been carried out at the time of termination.

See here.

8. The case of Imperial Chemical Industries Limited v Merit Merrell Technology Limited highlighted the risk of pursuing lengthy disputes following undesirable adjudication. What was the difference between the amount paid following adjudication and the findings on quantum later in Court (in figures)? (1 mark)

 £1,118,083.66. Fraser J found that the value of the works carried out as at the point of the repudiation equated to £22,018,083.66 versus the £20.9 million paid by the time the dispute was brought before the court.

See here.

9. In order to enforce the decision of an adjudicator, what must the enforcing party be able to demonstrate on a summary judgement basis? (2 marks)

An enforcing party must be able to demonstrate:

  • that there was a construction contract between the parties; and
  • that the dispute to which the decision relates arose under the contract.

See here.

10. How many horses pull the sleigh in the song ‘Jingle Bells’? (1 mark)

One.

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We are pleased to be hosting the Forum for the Built Environment first Leeds event of 2019 taking place on 24 January. This panel discussion with explore predictions for the built environment in 2019 including legal updates, development in Leeds, and a market outlook. For more details and to book your place please visit the fbe Leeds website here.

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