Arbicon explain whether a case that is the subject of ongoing arbitration or court proceedings can be referred to adjudication
Litigation, particularly of construction contracts, can be a very slow complex process. Claimants easily become frustrated at the delay tactics of the Respondent and spiralling costs of the proceedings, which have to be paid for often years before a final decision is made. So can the fast-track 28 day justice metered out by adjudication be implemented when one is already in court? It is a well-known fact that two forums of proceedings under English Law (e.g. court or arbitration) cannot be heard at the same time.
Herschel Engineering Ltd v Breen Properties (2000)
In Herschel Engineering Ltd v Breen Properties (2000) court proceedings were underway; the Claimant was frustrated and faced with lengthy and costly action. Adjudication was commenced despite the active court case. The adjudicator made an award for the Claimant and the Respondent refused to pay leading to summary judgment proceedings in court. The defence argued that the adjudication was void on the grounds that two forums are prohibited.
The court held that the multiple forum rule does not apply to adjudication under the Construction Act (HGCR Act 1996). Indeed the intention of Parliament was to provide an interim enforceable decision on disputes, which can be overturned by final court or arbitration proceedings. There is no express statement in the statute prohibiting adjudication once litigation or arbitration has commenced. On the contrary, Section 108 of the Construction Act, which stipulates party rights says under 108(2)(a) that a party shall have the right to refer a dispute to adjudication “at any time”. The Claimant thus obtained payment and costs from the Respondent and the court proceedings were dispensed with.
In summary, if you have a construction contract and you are engaged in court or arbitration proceedings, frustrated by the costs and delays, you can adjudicate, obtain payment at a low cost and most probably dispense with your court or arbitration proceedings.
Arbicon are adjudicators and experts in all forms of ADR. For advice from one of our experts, please use our contact form or call our offices below:
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