22-03-2010
Enforcing the Oracle
SG South Ltd v Swan Yard (Cirencester) Ltd [2010] (TCC)*
*[BPE Solicitors LLP acted for the successful enforcing party in this action as well as its sister action, SG South Ltd v (1) King’s Head (Cirencester) Ltd (2) Cornhall Arcade Ltd [2009] (TCC) covered in our December 2009 edition - please click here for more information]
It’s impossible to enforce an adjudicator’s decision where there is no contract in writing, right? Wrong apparently, according to the TCC who handed down judgment leading to the award to SG South of £70,450.14 plus VAT based on an unsigned JCT Management Contract.
The crucial point is that Swan Yard never reserved its position on the adjudicator’s jurisdiction. To the contrary, it based its submissions in the adjudication on the assumption that the terms of the JCT contract applied. More specifically, Swan Yard expressly waived any jurisdictional challenge in a letter dated 28 August 2009 to SG South.
The bottom line is that if you do not expressly reserve your position, you are highly unlikely to be able to complain if it all goes wrong at a later date. A party may not go back on its concession if it then goes on to exchange written submissions evidencing a contract in writing. Section 107(6) of the Construction Act can be argued very effectively in such circumstances.
Several other reminders result from this judgment:
• If arguments fail in adjudication, raising the same arguments again at enforcement stage will not work if the adjudicator has had necessary jurisdiction to come to a decision.
• An argument based on mathematical errors in the decision itself will only be successful on the basis set out in George Osborne v Atkins Rail discussed above.
• Commencing proceedings in another TCC (in this case, Bristol) to determine a final account is inappropriate where there has already been an adjudicator’s decision, which is temporarily binding and which has not been honoured. The fact that there are ongoing proceedings to deal with the underlying issues will not change that fact.
• The enforcing party should deal with multiple enforcements against the same defaulting party in the same application. It seems that this applies whether or not the underlying contracts and issues raised are different. Otherwise, the enforcing party will be penalised in terms of costs recoverable.
*[BPE Solicitors LLP acted for the successful enforcing party in this action as well as its sister action, SG South Ltd v (1) King’s Head (Cirencester) Ltd (2) Cornhall Arcade Ltd [2009] (TCC) covered in our December 2009 edition - please click here for more information]
It’s impossible to enforce an adjudicator’s decision where there is no contract in writing, right? Wrong apparently, according to the TCC who handed down judgment leading to the award to SG South of £70,450.14 plus VAT based on an unsigned JCT Management Contract.
The crucial point is that Swan Yard never reserved its position on the adjudicator’s jurisdiction. To the contrary, it based its submissions in the adjudication on the assumption that the terms of the JCT contract applied. More specifically, Swan Yard expressly waived any jurisdictional challenge in a letter dated 28 August 2009 to SG South.
The bottom line is that if you do not expressly reserve your position, you are highly unlikely to be able to complain if it all goes wrong at a later date. A party may not go back on its concession if it then goes on to exchange written submissions evidencing a contract in writing. Section 107(6) of the Construction Act can be argued very effectively in such circumstances.
Several other reminders result from this judgment:
• If arguments fail in adjudication, raising the same arguments again at enforcement stage will not work if the adjudicator has had necessary jurisdiction to come to a decision.
• An argument based on mathematical errors in the decision itself will only be successful on the basis set out in George Osborne v Atkins Rail discussed above.
• Commencing proceedings in another TCC (in this case, Bristol) to determine a final account is inappropriate where there has already been an adjudicator’s decision, which is temporarily binding and which has not been honoured. The fact that there are ongoing proceedings to deal with the underlying issues will not change that fact.
• The enforcing party should deal with multiple enforcements against the same defaulting party in the same application. It seems that this applies whether or not the underlying contracts and issues raised are different. Otherwise, the enforcing party will be penalised in terms of costs recoverable.
