Allied London & Scottish Properties Plc v Riverbrae Construction Ltd [1999] ScotCS 170

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The adjudicator's failure to consider all possible alternatives did not invalidate his decision. No lawful basis for postponing payment of sums awarded to referring party, including payment of award into joint deposit account.

Lord Kingarth, Outer House, Court of Session (Scotland)

12 July 1999

R contracted to execute works for A under a number of construction contracts. R claimed payment under 4 of these, and payment was disputed. R therefore gave notice of its intention to refer these disputes to adjudication. The adjudicator conducted the adjudications as 4 separate proceedings, and made final decisions in each case that A pay R various sums under each contract within 14 days with interest. A sought judicial review of these decisions.

A claimed that the sums claimed were extinguished as they fell due under the Compensation Act 1592. However, the sums claimed by A arose under different contracts to those under which the decisions had been made. A accepted during the hearing that this was not a matter which the court could review now. Instead, A focused on the decision to order payment within 14 days.

A also argued that the adjudicator should have ordered that the payments awarded be placed on a joint deposit account pending determination of all the disputes between A and R. The adjudicator found that he had no such power under the Act or the Scheme to make that decision. A said that the adjudicator had failed to address his mind properly to the question of whether he should make orders for payment peremptorily. A asked that the matter be remitted to the adjudicator to consider whether a peremptory order should be made. R believed this argument was misguided.

The court believed that the joint deposit account submission made by A flew in the face of the intention of the Act. Although the adjudicator was given wide powers to decide matters referred to him, and while he had a discretion whether to order immediate payment and could have addressed himself to a number of other options, he was not bound to consider alternatives when the only submissions made to him were limited to the joint deposit account. The court also noted that it did not consider the adjudicator could logically or lawfully have made an order in effect postponing payment pending resolution of A's claims. A was unable to suggest any legal basis for such an approach.

In these circumstances, the court held that it could not be suggested that the adjudicator failed to take into account matters which he was bound to take into account or that he made any error of law going to the root of his jurisdiction. A's application was therefore refused.

The adjudicator's failure to consider all possible alternatives did not invalidate his decision. No lawful basis for postponing payment of sums awarded to referring party, including payment of award into joint deposit account.

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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