New Judgment Provides Clarity on Enforcement of Adjudicators’ Decisions in Construction Disputes

Judgment in Historic Royal Palaces and Piperhill Construction Ltd [2023] NIKB 30 was delivered on 3 March 2023. It provides re-affirmation of the law on enforcement of adjudication decisions, demonstrating that the Northern Irish courts are closely aligned with England and Wales, protecting and bolstering the impact of statutory adjudication.

Background

Piperhill entered into a lump sum capital JCT (2001 Edition) Construction Management Trade Contract with Historic Royal Palaces (HRP) to carry out construction works at Hillsborough Castle.

On 25 March 2022, Piperhill issued a writ seeking a declaration that a decision of an adjudicator dated 16 March 2022 was made in excess of his jurisdiction and/or in breach of the rules of natural justice and should be set aside. Piperhill, in the alternative, sought a declaration concerning the true value of the works carried out by it.

On 25 August 2022, HRP issued a writ seeking judgment against Piperhill in respect of the adjudicator’s award dated 16 March 2022.

HRP then issued an application for summary judgment on 14 October 2022. Piperhill sought to resist the application for summary judgment on the grounds that:

1. The adjudicator lacked jurisdiction;
2. The adjudicator erred in his decision making; and
3. In the event the court considered that it should make an order for summary judgment, it should be stayed on the grounds of:-
   1. delay by HRP;
   2. hardship to Piperhill; and
   3. on the basis Piperhill’s true value proceedings can be heard on an expedited basis and in accordance with the overriding objective it should be dealt with first, thereby avoiding the need for a separate interim hearing regarding enforcement of the adjudicator’s decision.

Analysis

Madam Justice McBride considered the relevant case law on enforcement at length and the intentions of parliament.

The learned Judge stated that the purpose underlying the Construction Contracts (Northern Ireland) Order 1997 (“the 1997 Order”) and the 1999 Regulations (the Northern Irish equivalent of the HGRA 1996 and the Scheme) was explained by Dyson J in Macob Civil Engineering Ltd v Morrison

Construction Limited [1999] BLR 93 at 97 para [4]:

“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”.

McBride J referred to Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] All ER 202 at para [52] as a convenient summary of the applicable legal principles regarding enforcement of adjudication awards, namely that:

1. “The adjudication procedure does not involve the final determination of anybody’s rights (unless all the parties so wish);
2. The Court of Appeal has repeatedly emphasised that adjudicators’ decisions must be enforced, even if they result from errors of procedure, fact or law (Bouygues, C & B Scene and Levolux);
3. Where an adjudicator has acted in excess of his jurisdiction or in serious breach of the rules of natural justice, the court will not enforce their decision (Discain, Balfour Beatty and Pegram Shop Fitters);
4. Judges must be astute to examine technical defences with a degree of scepticism consonant with the policy of the 1996 Act. Errors of law, fact or procedure by an adjudicator must be examined critically before the court accepts that such errors constitute excess of jurisdiction or serious breaches of the rules of natural justice (see Pegram Shop Fitters and Amec).”

At para [38] onwards, the Court concluded:

1. Adjudication decisions should be enforced unless the adjudicator lacked jurisdiction, or they otherwise acted in serious breach of natural justice
2. Adjudication decisions should be enforced even if the adjudicator erred unless the error is in respect of a “short and self-contained point” which does not require oral evidence. When a party wishes to oppose summary judgment on this basis, they should issue an originating summons for a declaration which will be heard at the same time as the summary enforcement proceedings. If a party fails to issue an originating summons seeking a declaration, this should not stand in the way of justice being done and, therefore, the court will usually allow the point to be argued if it would be otherwise unconscionable not to deal with it.
3. If the court determines that the adjudication award is enforceable and grants summary judgment the defendant can invite the court to exercise its discretion to stay enforcement. The court’s discretion will be exercised to ensure fairness and justice in all the circumstances whilst having regard to the legislative intent of Parliament, summarised in the “pay now argue later” principle and in accordance with the principles which have emerged from the existing jurisprudence in relation to enforcement of adjudication decisions.

Conclusion

The decision of McBride J demonstrates that the Northern Irish courts will continue to protect and bolster statutory adjudication in Northern Ireland by seeking to swiftly enforce adjudicator’s decisions and resist applications for stays of enforcement in all but the most obvious cases.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Property & Construction team at Cleaver Fulton Rankin for further advice or information.

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