Impresa Castelli SpA v Cola Holdings Ltd [2002] EWHC 1363 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

On the facts of this case and the particular dispute resolution clause, a party was not bound to adjudicate before proceeding to arbitration or litigation as the adjudication provisions related to works which were ongoing and not to events after termination.

HHJ Anthony Thornton QC, Technology and Construction Court

2 May 2002

CH employed IC as the main contractor under a JCT 1981 Edition with Contractor's Design, to construct a large four star hotel in London. The contract sum was for £10.35m. The parties were in dispute from an early stage and the project was subject to delay. In early 2000 some of the disputes were referred to adjudication. In August 2001, IC instituted its own legal proceedings for loss and expense and CH counterclaimed. His Honour Judge Thornton QC decided various preliminary issues.

The contract included a complicated dispute resolution procedure which provided that disputes as to whether the works were carried out in accordance with the contract, could not be referred to arbitration but to adjudication. Once the matter had been adjudicated it could only be arbitrated after Practical Completion had taken place. The parties in fact waived the right to arbitrate in favour of litigation.

IC argued that CH's counterclaim, based on breaches of contract that resulted in defective work, was covered by the adjudication provisions of the contract. They had not been referred to adjudication in 2000 and could therefore not be arbitrated or litigated. The Judge rejected this argument. He found that the disputes concerned the existence and effect of alleged defects which came to light after termination of the works. The dispute was about damages recoverable as a result of that termination. Additionally, the dispute related to whether the works had been executed in accordance with the contract conditions. The adjudication provisions of the contract related to works that were ongoing and not the state of the works once that work had been completed or terminated.

On the facts of this case and the particular dispute resolution clause, a party was not bound to adjudicate before proceeding to arbitration or litigation as the adjudication provisions related to works which were ongoing and not to events after termination

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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