Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd No 2 [2007] EWHC 2507 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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

The Court has a statutory discretion as to what interest is payable on sums awarded by an adjudicator from the date upon which the cause of action arises until the date on which judgment is given.  The cause of action in an enforcement application of an adjudicator’s decision is the failure by the unsuccessful party to comply with that decision, therefore that will be the date from which the Court has discretion to award interest. 
Mr Justice Akenhead – Queen’s Bench Division, Technology and Construction Court

Background


Ringway was awarded summary judgment enforcing an adjudicator’s decision relating to payment against Vauxhall (please click here to read a summary of that decision).  It was held by Mr Justice Akenhead that net payment was due and payable on 24 May 2007.  However, the adjudicator had only awarded interest from 2 July 2007, at a rate of £375.04 per day.

Issue

The issue that arose was whether or not the Court, upon the enforcement of an adjudicator’s decision, had a discretion under section 35A of the Supreme Court Act 1981 to order interest upon any sum adjudicated due and payable for a longer period (and possibly at a different rate) to that allowed by the adjudicator; and if so, how that discretion should be exercised.

Decision

Akenhead J held that the nature of enforcement of an adjudicator’s decision was contractual.  Therefore, the cause of action upon which Ringway had to rely was Vauxhall’s breach of contract, namely its failure to comply with the adjudicator’s decision.  The Court’s discretion under the Supreme Court Act 1981 was limited to deciding what interest to award between the date by which Vauxhall had to comply with the adjudicator’s decision and the date of judgment.  However, given that the adjudicator had sensibly quantified interest up to 21 August 2007 and then ordered interest to be paid at a daily rate of £375.04 until the awarded amount was paid, the judge found that that daily rate of interest would be allowable.

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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