Naylor (William) v Greenacres Curling Ltd [2001] Outer Ct of Session P514/01

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The Court (in Scotland) may be prepared to grant interdict and suspension to prevent a void adjudication from proceeding. Where the remedy of interdict and suspension is sought, the Court of Session is being asked to exercise its supervisory jurisdiction and the application must therefore be made by way of petition for judicial review.

Lord Bonomy, Outer House, Court of Session

26 June 2001

P entered into a contract with G to lay and finish a concrete surface at an ice rink. The provisions of the Scottish adjudication Scheme applied to that contract. P completed the works and rendered an invoice. G refused to pay on the basis that the concrete supplied did not comply with the contract specification.

In the first adjudication initiated by the petitioners, the dispute referred was whether P was entitled to payment of the invoice of the concrete floor slabs. The adjudicator decided in P's favour. In the second adjudication commenced by G, the dispute was whether P had failed to meet the specification so the ice rink slab was defective and not in accordance with the contract. P sought interdict (the Scottish equivalent of an injunction) and suspension of a second adjudication started by G on the basis that the dispute was substantially the same as the dispute in the first adjudication and was therefore void on the basis of para 9(2) of the Scottish Scheme.

G submitted that there was a difference in the disputes referred namely that the first adjudication was held to determine whether the money should be paid, while the second was to identify deficiencies in P's work. P claimed that the first adjudicator's decision, when determining whether P's application for an order for payment should be granted or refused, dealt with the issue of whether P had failed to meet the specification.

The judge agreed with P and found that the second dispute referred to adjudication was substantially the same as the first.

G then argued (on the basis of Workplace Technologies v E Squared) that the Court did not have the power to grant an injunction (here to interdict) to restrain a party from initiating a void reference to adjudication. However, following Sinclair v Clyne's Trustee (1887) 15 R.185, the judge held that intervention by the Court in Scotland was permitted where an arbiter proposed to exercise a jurisdiction which he did not possess and that the same should apply in the case of an adjudicator. On this basis the Court was competent to pronounce interdict in such circumstances.

However, the judge held that, although interdict and suspension were the appropriate remedies sought, these were methods of effecting specific performance of the second adjudicator's statutory duty to resign as required by para 9(2) of the Scottish Scheme and concerned the supervisory jurisdiction of the Court. Since 1985 it has been mandatory to present applications to the supervisory jurisdiction of the Court by petition for judicial review. P's petition had not been framed as an application for judicial review and therefore failed.

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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