the Molloy decision. ISG said the net effect was that FKC was entitled to no more than
£900,000 for Project Barberry, less £67,000 due to ISG for Project Triathlon.
The Law
It was well- established that a party ordered to make payment under an adjudicator’s decision must usually pay in full, without deduction or set-off 9 as this would be contrary to the ‘pay now argue later’ policy of the Act. However , there were three limited exceptions:
(1) Where there was a contractual right set off provision that did not offend the statutory
requirement for immediate enforcement of an adjudicator’s decision ( Thameside
Construction v Stevens 10 ; BexHeat v Essex 11 ).
(2) Where it followed logically from the decision itself that a set off was permitted, for
instance where it was found that an overall amount was due but there was no order
for payment.
(3) In ‘an appropriate case and at the discretion of the court’, where there were two valid
adjudication decisions involving the same parties, the effects of which was that
monies were owed by each party to the other ( HS Works v Enterprise Managed
Services 12 ).
ISG argued that this case fell within the third limited exception. The court therefore looked
at the decision in HS Works , where the judge formulated four steps to be considered in
determining whether to set off two adjudicators’ decisions : • Step1, was to determine whether both decisions were valid. • Step 2, if both decisions were valid, they were capable of being enforced.
9 Ferson Contractors Ltd v Levolux AT Ltd [2003] BLR 118 .
10 Thameside Construction Co Ltd v Stevens [2013] EWHC 2071.
11 BexHeat Ltd v Essex Services Group Ltd [2022] EWHC 936 (TCC).
12 HS Works Ltd v Enterprise Managed Services Ltd [2009] EWHC 729 (TCC).
10
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