Cases - Macob Civil Engineering Ltd v Morrison Construction Ltd

Record details

Name

Macob Civil Engineering Ltd v Morrison Construction Ltd

Date

[1999]

Citation

CLC 739, BLR 93, 64 Con LR 1, 37 EG 173

Legislation

• Arbitration Act 1996
• Housing Grants, Construction and Regeneration Act 1996
• Scheme for Construction Contracts (England and Wales) Regulations 1998

Keywords

Construction Contracts - Adjudication - Validity of Decision - Speedy Mechanism - Adjudication settling disputes on interim provisional basis - Stay of proceedings - Summary Judgment - Enforcement - Whether mandatory injunction would be granted - Arbitration Act 1996, section 42 - Housing Grants, Construction and Regeneration Act 1996, section 108 - Scheme for Construction Contracts (England and Wales) Regulations 1998, paragraph 23 - enforcement of adjudication decision - reference to arbitration

Summary

This was the first case in which the court had an opportunity to consider the adjudication provisions of the Act. Macob were ground works contractors; they entered into a contract with Morrison to carry out ground works at a retail development in Wales. Disputes arose with regard to an interim application for payment, which Macob referred to adjudication. The adjudicator decided that Morrison should pay Macob the sum of £302,366.34 plus VAT, plus interest and the adjudicator's fees. Morrison did not comply with this decision and Macob applied for a mandatory injunction to enforce an adjudicator's decision.

Morrison defended the application on the basis that they were challenging the adjudicator's decision, which was therefore not enforceable; and also that the contract contained a valid arbitration clause.

With regard to the first point, the judge concluded that a decision in respect of which the validity is challenged is nevertheless a decision within the meaning of the Act and is therefore enforceable.

With regard to the arbitration clause, the judge refused to accept that just because the dispute was subject to a separate reference to arbitration the decision of the adjudicator should not be enforced.

The judge therefore gave a declaration in favour of Macob.

The scheme provided by section 108 of the Housing Grants, Construction and Regeneration Act 1996 was explained by Dyson J:

'The intention of Parliament in enacting the Act was plain. It was to introduce a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending the final determination of disputes by arbitration, litigation or agreement: see section 108(3) of the Act and paragraph 23(2) of Part 1 of the Scheme. The timetable for adjudications is very tight (see s 108 of the Act). Many would say unreasonably tight, and likely to result in injustice. Parliament must be taken to have been aware of this. So far as procedure is concerned, the adjudicator is given a fairly free hand.

It is true (but hardly surprising) that he is required to act impartially (section 108(2)(e) of the Act and paragraph 12(a) of Part 1 of the Scheme). He is, however, permitted to take the initiative in ascertaining the facts and the law (section 108(2)(f) of the Act and paragraph 13 of Part 1 of the Scheme). He may, therefore, conduct an entirely inquisitorial process, or he may, as in the present case, invite representations from the parties.

It is clear that Parliament intended that the adjudication should be conducted in a manner which those familiar with the grinding detail of the traditional approach to the resolution of construction disputes apparently find difficult to accept. But Parliament has not abolished arbitration and litigation of construction disputes. It has merely introduced an intervening provisional stage in the dispute resolution process. Crucially, it has made it clear that the decisions of adjudicators are binding and are to be complied with until the dispute is finally resolved.'