Cases - Construction Centre Group Ltd v Highland Council

Record details

Name

Construction Centre Group Ltd v Highland Council

Date

[2002]; [2003]

Citation

BLR 476; ScotCS 221

Keywords

Adjudication - construction contract - ICE standard form contract 5th edition - enforcement of adjudicator's decision - jurisdiction - jurisdiction of adjudicator - cross-claim

Summary

The Construction Centre Group entered into a contract with the Highland Council for the construction of an island ferry scheme based on the Institution of Civil Engineers (ICE) standard form of contract (5th edition). A dispute arose between the parties as to the Construction Centre Group's entitlement pursuant to an interim application for payment. The Construction Centre Group referred this dispute to adjudication. The adjudicator decided that a sum of £245,469.24 was payable by the Highland Council to the Construction Centre Group.

The employer sought to resist enforcement of an adjudicator's award on the grounds that he had various cross-claims against the amount awarded which he wished to set off and had served a valid withholding notice under s. 111.

The Highland Council failed to pay, so the Construction Centre Group commenced proceedings to enforce the adjudicator's decision.

The Highland Council sought to resist enforcement of the adjudicator's decision and made its own claim on the basis that it was entitled to a sum of £420,000 as liquidated damages for delay.

There was some dispute as to whether the adjudicator was, or might have been, seized of jurisdiction to determine the employer's entitlement to liquidated damages, but it was accepted that the Highland Council could, if it had seen fit, have relied on this claim before the adjudicator.

The court concluded that because the contra-debt for liquidated damages had not been relied upon as it might have been before the adjudicator, the Highland Council could not, consistent with its contractual obligations to give effect forthwith to the adjudicator's award, now plead compensation on the basis of that contra-debt. The Highland Council, having allowed the adjudicator's order to pass against it when it might have pled an admissible contra-debt in answer is, by virtue of its contractual obligation to give effect forthwith to that decision, precluded from pleading in the judicial action of enforcement compensation on the basis of that contra-debt.

It was held that s. 111 does not apply to payments due as a consequence of an adjudicator's decision. Such amounts must be paid in full.