SG South v Swan Yard (Cirencester) [2010] EWHC 376 (TCC)

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Where an adjudicator erroneously finds that he has jurisdiction in relation to a dispute, notwithstanding the fact that there is no written contract between the parties, then exchanges in the adjudication and/or enforcement proceedings where the existence of a contract otherwise than in writing is alleged and not rebutted by the responding party can constitute a written contract and thus serve to establish the necessary jurisdiction. 

Technology and Construction Court, Mr Justice Coulson


The claimant contractor (“South”) sought to enforce an adjudicator’s award for £98k by way of summary judgment against the defendant employer (“Swan Yard”).   Swan Yard resisted enforcement.  South subsequently conceded that the adjudicator had awarded it £28k more than it was entitled to (as Swan Yard had made payments in this amount directly to South’s subcontractors), and South therefore sought a reduced sum of £70k.     


The Court addressed the following issues:

  • When he was appointed the adjudicator noticed that there was no written contract between the parties.  Although Swan Yard had not challenged his jurisdiction, he decided that it was proper to investigate the issue.  He found that there was no written contract, but notwithstanding this that he had jurisdiction.  The Court addressed the question of the adjudicator’s jurisdiction despite the fact that Swan Yard did not raise a challenge.      
  • In previous proceedings arising from the same project brought by South against an associated company of Swan Yard, the defendant sought, unsuccessfully, to resist the enforcement of an adjudicator’s decision on the grounds that those parts of the decision relating to South’s entitlement to interim payment, which the defendant opposed, would be resolved when the Final Account was agreed between the parties.  Swan Yard attempted to raise the same issue again in this case and had commenced separate court proceedings in which the value of the Final Account was to be addressed, and as result sought to adjourn the enforcement hearing on the grounds that the Final Account proceedings were the natural forum to finally determine the case.  
  • Swan Yard alleged that the adjudicator had made mistakes when calculating the sums due to South.     


The Court held:

  • The adjudicator had been wrong to find that he had jurisdiction in circumstances where there was no written contract.  Pursuant to s.107 of the Housing Grants Construction and Regeneration Act 1996 a written contract between the parties was necessary to establish his jurisdiction.  However, pursuant to s.107(5) of the Act, an exchange of written submissions in adjudication or legal proceedings in which one party alleges the existence of an agreement otherwise than in writing which the other party does not deny constitutes a written contract for the purposes of s.107.  The exchanges in the adjudication and/or the exchanges in the present court proceedings amounted to such an exchange of written submissions and the adjudicator therefore had the necessary jurisdiction.
  • The attempt by Swan Yard to adjourn the enforcement proceedings was rejected.  There was an adjudicator’s decision that was temporarily binding and had not been honoured; it was irrelevant that there were ongoing legal proceedings to finally determine the dispute.
  • The adjudicator had not made mistakes of the type alleged by Swan Yard.  Even if he had made such mistakes then they would not prevent enforcement of the decision, as an adjudicator has the jurisdiction to make mistakes provided that he has asked himself the right question.
  • Accordingly the adjudicator’s decision would be enforced in the sum of £70k. 
  • With regard to costs, Swan Yard should pay the costs of the proceedings.  The fact that South made a concession in the sum of £28k was neither here nor there, as Swan Yard had wrongly continued to resist the application in full.  (However, South’s costs were summarily assessed at £10,250 rather than the £18,000 claimed, as the Court felt that all that had been necessary on South’s part was a claim form and a copy of the adjudicator’s decision). 

This summary was provided by CMS Cameron McKenna LLP.

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