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Does commencing a trial to finally determine the dispute prevent the court from enforcing an Adjudicator’s decision?

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18/10/2016

Niken Construction Limited v Trigram Carver Street Limited [2016] EWHC 2232 (TCC)

Niken Construction Ltd (Niken) sought to enforce the decision of an Adjudicator against Trigram Carvel Street Limited (Trigram). Trigram had also commenced separate proceedings seeking a final determination of the issues which formed the subject matter of the adjudication, as well as various other issues which had arisen between the parties.

The adjudication in question was the third that had taken place between the parties under the same contract. The same Adjudicator was appointed in both the second and third adjudications. Each party contended that it had validly terminated the building contract. In the second adjudication, the Adjudicator decided that Trigram did not terminate the contract. In the third adjudication, the same Adjudicator decided that Niken had successfully terminated the building contract and that as a result Niken was due monies on its termination account.

Trigram argued that it was entitled under the Construction Act to have adjudication decided in legal proceedings and to seek declaratory relief as to the matters at issue. These enforcement proceedings were heard in the Birmingham District Registry of the TCC. The TCC rejected Trigram’s challenge and confirmed that while it is indeed correct that Trigram had a right to have matters in issue finally determined, whether by litigation, arbitration or any other appropriate form of dispute resolution; that is not of itself a good reason why a valid decision of an adjudicator should not be enforced.

Trigram also sought to argue that there had been a breach of natural justice in that the Adjudicator had made an error in reaching the wrong conclusion in both the second and the third adjudication. The TCC also rejected this challenge, stating that the fact that the Adjudicator may have been wrong is not a reason for his third decision not to be enforced. The objection made by Trigram alleged a mistake of fact or law. It did not go to matters of natural justice.

Trigram then argued that it had a real prospect of successfully defending Niken’s claim at trial. The TCC agreed with Niken that this ground was meaningless because Niken’s claim was not one in which it sought to litigate the underlying issues between the parties, but was instead an application to enforce a valid decision of an Adjudicator.

Trigram’s also sought to challenge enforcement on the basis that the disputes between the parties were complex, and it was desirable for all matters to be heard together at trial to be decided once and for all. The TCC also rejected this submission, finding that the mere fact that the underlying issues between the parties are complex and/or substantial is not of itself good or sufficient reason not to enforce a valid decision of an Adjudicator.

Accordingly the TCC was not persuaded by Trigram’s arguments, and enforced the Adjudicator’s decision such that payment was due to Niken.

This case is a reminder of the difficulties in persuading a court to resist enforcement of an Adjudicator’s decision. Whilst a party has a right to have its dispute finally determined at trial, the Adjudicator’s decision should be complied with in the interim until the final determination has been obtained. This is in line with the “pay now, argue later” ethos of the Construction Act.

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