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Challenge to Contract Adjudicator’s Decision Precluded by Affirmation

HotelContract adjudicators’ conclusions are never easily overturned and, in an important ruling, the High Court found that any opportunity that a developer may have had to do so was lost when it affirmed an adjudicator’s decision by asking him to amend it.

By a contract worth £6.9 million, the developer employed a contractor to design and build a hotel together with retail and restaurant units. The project was effectively complete when the contract was terminated in disputed circumstances and four sets of adjudication proceedings ensued. The developer was ultimately ordered to pay the contractor £1,249,674 as a final account for work done. In challenging that ruling, the developer argued that the adjudicator had, in breach of natural justice, failed to deal with important parts of its case.

Following initial circulation of the adjudicator’s decision, the developer had asked him to make corrections to it under the slip rule. In doing so, it had not reserved its right to pursue a challenge to his decision. In the circumstances, the Court found that the developer had affirmed the decision and elected to treat it as valid. It was thus precluded from challenging it and the contractor was entitled to summary judgment for the full amount of the award. In its ruling, the Court acknowledged that the case had raised an important point of principle.