Adjudications are supposed to be a quick and cost-effective way of resolving contract disputes. However, one company found out that they can be fraught with difficulties after almost losing out on more than £100,000 due to an arithmetical error.
Company A was contracted by company B to carry out works on a concrete frame which was being put in place at a regional theatre. The parties fell out in respect of sums due under the contract and referred the matter to an adjudicator. He directed company B to pay company A about £230,000.
Company A spotted that the adjudicator had made a calculation error and, after he accepted that fact, he increased the award by more than £100,000. Company B, however, denied that it was obliged to pay the additional sum. It pointed to a provision in the contract which stipulated that any mistakes on the part of the adjudicator had to be formally notified within 14 days of his decision.
In upholding company A’s claim and ordering company B to pay the additional sum, the High Court found that an email which the former had sent to the adjudicator before the deadline, although far from a model of good drafting, amounted to an operative request that he should put right his mistake.