Stiell Ltd v Riema Control Systems Ltd [2000] Inner Ct of Session X1/53/00

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An arrestment may be made in court proceedings to freeze monies that an adjudicator has previously held are not due and owing. Such an arrestment is not oppressive

Lord Prosser, Lord Philip and Lord Caplan, Extra Division, Inner House, Court of Session (Appeal from Sherriffdom of South Strathclyde, Dumfries & Galloway)

23 June 2000

This case concerns the issue of arrestment in Scottish proceedings.

R instructed S to carry out supply and installation of control and electrical equipment. The contract contained an adjudication clause providing that the CEDR rules applied. In December 1999, S commenced adjudication proceedings concerning a valuation dispute, including valuation of additional work. In February, the adjudicator found that the total value of works was £220,336, and ordered that R must pay S the sum of £58,655. R paid that sum.

Meanwhile, in January, S had commenced an action in court, and sums due to R in the hands of a third party were arrested. The amount arrested was restricted to £160,000. In February, the amount arrested was reduced by agreement to £90,000. In this application, R applied for the arrestments to be recalled on the grounds that they were incompetent, or nimious and oppressive. This was on the basis that the action concerned the same issues as the adjudication, and R had paid the amount awarded by the adjudicator.

The Court rejected these arguments (as the sheriff at first instance had done). The contention of R appeared to be that S's claim in the action was extravagant or excessive. The adjudicator's decision had been that the balance of what S sought was not due. R said it was unfair that S could be paid what had been held to be due but also to freeze the balance of what the adjudicator had said was not due. The Court was not persuaded, and said the claim had been made with a proper motive and on a normal basis. Therefore, there was no good ground for recalling the arrestments.

An arrestment may be made in court proceedings to freeze monies that an adjudicator has previously held are not due and owing. Such an arrestment is not oppressive.

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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