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Contract Adjudicators Can’t Always Be Right!

Contract adjudicators do valuable work in promoting the swift resolution of disputes at relatively low cost – however, they do not always reach the right conclusions and the courts are there to put right any injustice caused. In one case, an adjudicator’s award of almost £350,000 to an engineering subcontractor was overturned.

A contractor working on a residential development had engaged the subcontractor to carry out certain preparatory ground works. The total contract price was in excess of £1.8 million and the standard form design and build agreement provided for staged applications for payment and specified dates for those payments.

The subcontractor applied for a payment of £346,177. The contractor failed to pay that sum and the subcontractor responded by suspending work on the site. The contractor had not disputed the amount claimed within the time limit prescribed by the contract and an adjudicator found that the whole sum was thus payable.

The subcontractor applied to the High Court to enforce the adjudicator’s award. In rejecting that application, however, the Court found that there had been a settlement of the dispute before the adjudicator considered the matter. The contractor had agreed to make an interim payment of £79,862 in return for the subcontractor’s withdrawal of its claim and its return to work. Both these events happened. The settlement agreement was evidenced by an exchange of emails and the adjudicator was therefore wrong to uphold the subcontractor’s claim.