Ritchie Brothers Ltd v David Philp Ltd [2005] ScotCS CSIH_32l

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The 28-day time limit set out in the statutory adjudication scheme is mandatory.  If the adjudicator needs to apply for an extension of time, he must do so before expiry of that deadline, otherwise his decision and any purported extension will not be valid.

Lord Justice Clerk, Lord Abernethy and Lord Nimmo Smith – Inner House, Court of Session

Background

A dispute was sent to the adjudicator on 18 September 2003 under the (Scottish) statutory adjudication scheme.  According to the Outer House of the Court of Session, the 28-day period in which the adjudicator was due to reach his decision started running on the date that the notice was sent, therefore the deadline for reaching a decision was 16 October. (NB – the English courts have departed from this position: in Aveat Heating v Jerram Falkus Construction [2007], it was held that the date of referral was the date of receipt of the notice, not the date upon which the notice was sent.) 

However, the referral went astray in the post and only reached the adjudicator on 23 September.  On 21 October, the adjudicator requested that the referring party consent to the postponement of his decision until 23 October.  Although he reached his decision on 23 October it was only sent on 27 October (and dated that day).  The only live issue before the Scottish appellate court was whether the adjudicator’s jurisdiction had expired on 16 October.

Decision

The court held that the decision was not only reached out of time, but that the adjudicator’s request for an extension of time from the referring party was made out of time.  The 28-day period in the statutory adjudication scheme was mandatory.  The adjudicator’s jurisdiction terminated automatically on expiry of that 28-day period (unless an extension of time had been granted before the deadline) and not only in the event that one of the parties issued a fresh notice of adjudication, as was suggested by the claimant.

The court also rejected the claimant’s alternative argument that the failure to reach the decision within the time limit was a technical failure and one that was not sufficiently serious to render the decision a nullity.
The adjudicator’s decision was unenforceable.

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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