Adjudication was provided for with the introduction of the Construction Contracts Act 2013 (the “2013 Act”), and the right of a party to a construction contract to refer a ‘payment dispute’ arising on foot of that construction contract to adjudication was provided for by Section 6 of the 2013 Act.
Section 6(10) of the 2013 Act provides that the decision of the adjudicator shall be binding until the payment dispute is finally settled by the parties or a different decision is reached on the reference of the payment dispute to arbitration or in proceedings initiated in a court in relation to the adjudicator’s decision.
Section 6(11) of the 2013 Act provides that the decision of an adjudicator, if binding, shall be enforceable either by action or by leave of the High Court in the same manner as any other judgment or order of the Court. The section provides that where that leave is provided by the High Court, the party seeking leave may enter judgment against the other party in the terms of the decision.
While the Act has been in force since July 2016, the adjudication path is not one which can be described as ‘well-trodden’ by way of judgments from the Courts, just yet. Therefore each formal judgment that touches upon adjudication and the enforcement of adjudicators’ decisions, helps to shed light on the Courts’ approach to the provisions of the 2013 Act, and each judgment is reviewed with interest by lawyers and those involved in the construction sector. All applications which have come before the Court for enforcement of an adjudicator’s decision to date have been successful.
John Paul Construction Limited v Tipperary Co-operative Limited [2022] IEHC 3
In this case, the proceedings concerned an application for leave by the Plaintiff Contractor to enforce an adjudicator’s decision which the Defendant sought to resist on several grounds.
The Court’s judgment provided some very helpful commentary about the operation of the adjudication regime in Ireland, touching upon the careful balance which must be maintained between respecting the legislative intent behind the 2013 Act to provide for an expeditious dispute resolution mechanism on the one hand, and the importance of the existence of judicial discretion on the other hand, as a safeguard which ensures
confidence in the statutory scheme of adjudication.
The Court noted that the 2013 Act does not designate a decision of an adjudicator as final and conclusive, rather it is envisaged that an adjudicator’s decision may be “superseded by a subsequent decision reached in arbitral or court proceedings”. The Court referenced the successful party’s right to seek to enforce the adjudicator’s decision forthwith by invoking summary procedure, notwithstanding the face that the adjudicator’s decision is amenable to be overreached by a subsequent decision of an arbitrator or the
court (i.e. the “pay now, argue later” principle).
Furthermore, the Court made it very clear that it would undermine the legislative policy of “pay now, argue later” were the Court to refuse to enforce an adjudicator’s decision precisely because the adjudicative process failed to replicate that of conventional arbitration or litigation – in other words the legislative intent underlying Section 6 of the 2013 Act, that the adjudication process would be far more expeditious than arbitration or litigation, meant in turn that the adjudication process will necessarily be less elaborate than conventional arbitration or litigation. The Court noted was the “precise purpose” of the legislation, which provides for a dispute resolution mechanism intended to assist in fulfilling the need for prompt payments in the construction industry, all the while not affecting the rights of either party to pursue litigation or arbitration afterwards.
In this case, Judge Simons concluded that the Plaintiff was entitled to enforce the adjudicator’s decision by invoking summary procedure but noted that the grant of leave to enforce did not preclude the defendant from pursuing the matter further, whether by way of arbitral or court proceedings.
Western Excavations and Ground Works Ltd v Glenman Corporation Ltd Record No. 2022/165 MCA
Although there is no written judgment to refer to, a recent report on the outcome of this particular matter, which also came before Judge Simons, concerned the enforcement of an Adjudicator’s decision before the Courts, and also touched upon the topic of the
Adjudicator’s fees.
The Plaintiff was a groundworks sub-contractor who was engaged by the Defendant, the main contractor, on a project. A dispute arose between the parties which was referred to adjudication pursuant to the 2013 Act. The Adjudicator’s terms provided for a joint and several liability in respect of his fees. The decision of the Adjudicator was in favour of the Plaintiff and when the amount found by the Adjudicator to be payable to the Plaintiff
was not paid, the Plaintiff brought enforcement proceedings before the High Court. Judge Simons in the High Court granted an Order in favour of the Plaintiff enforcing the Adjudicator’s decision, and also made an additional Order in the Plaintiff’s favour regarding the Adjudicator’s fees which as per the Adjudicator’s terms, were payable on a joint and several basis.
The Orders made by the Court, and the success of enforcement applications to date, show judicial approval for the system of adjudication as provided for by the 2013 Act and thus gives the Act ‘teeth’ in demonstrating that unsuccessful parties will be brought before a supportive judiciary for the enforcement of any decision made in adjudication. This position is to be welcomed, as any expedition which can be availed of in these
disputes will save valuable time and money for all parties concerned.
