Contract Adjudications are an Alternative to Litigation, Not an Addition

Contract adjudications can provide a swift and cost-effective alternative to litigation. Adjudication decisions are not immune from error but, as a High Court case showed, they are meant to be final and those who challenge them face an uphill struggle.

The owner of a large commercial building engaged a contractor to convert it into a hotel. Completion of the project was delayed by about 16 months and various disputes arose, giving rise to no fewer than four adjudications. Following the last of those, an adjudicator assessed the contractor's final account and directed the owner to pay it an additional sum in excess of £1.16 million.

After the contractor launched enforcement proceedings, the owner argued that the adjudicator had, in breach of natural justice, disregarded expert evidence as to the causes of the delay before embarking upon his own analysis. He was also alleged to have failed to address a key aspect of the owner's case – that the contractor's claim in respect of its liabilities to subcontractors arising from the delay was manufactured and infected by fraud.

In rejecting those complaints, however, the Court could detect no material failure in the adjudicator's analysis of the delay issue. Even if he had failed to consider every sub-issue, or overlooked some element of the evidence or the case put forward by the owner, his decision was not rendered so unfair that it should not be enforced. The owner's fraud allegation had not been clearly put before the adjudicator and it could therefore not be said that he had failed to address that point.