“A difficult task could become impossible if one party could unilaterally require the adjudicator to determine a raft of disputes within one adjudication. There is implicit recognition of this difficulty in clause 30.3 in that it does not compel the adjudicator to determine more than one dispute, even where such election has been made by ESG.” Further in this case section 111 of the Act would preclude ESG from relying on clause 30.3 to refer the 'true value' dispute in respect of Interim Application 23 prior to satisfying its obligation to pay the 'notified sum' as explained in S&T v Grove. Applying the principles to be derived from the case, ESG's exercise of any contractual right under clause 30.3 of the Contract to require the adjudicator to determine the 'true value' dispute together with the 'notified sum' dispute in the same adjudication would have to be subject to compliance with its immediate payment obligation of the 'notified sum'. As ESG failed to comply with its immediate payment obligation in respect of the 'notified sum', it was not entitled to adjudicate on the 'true value' dispute, whether pursuant to clause 30.3 or otherwise.
Applying the principles set out by Coulson LJ in Bresco[6] , following rejection by Mr Silver of the specific jurisdictional objection, ESG was precluded from raising other jurisdictional grounds which might otherwise have been available to it. Thirdly, ESG argument ignored the express provisions of section 111 of the Act. Had ESG wished to rely on the 'true valuation' adjudicated upon in the First Adjudication against any further payment sought in Interim Application 23, it could and should have raised this in a Pay Less Notice. Having failed to do so, the sum claimed in Interim Application 23 became the 'notified sum' due for the purpose of the section.
Issue 2: Right of set-off
ESG relied on an express contractual right of set-off against an adjudicator’s award. The problem with that provision was that it was contrary to section 8 of the Act and clause 30 of the Scheme (which applied here). The court of appeal had held that a right of set-off could not be relied on as defence to enforcement of an adjudicator’s decision[7]. The limited exceptions identified by Akenhead J in Thameside[8] did not apply here. The set-off relied on did not arise out of either of the adjudication decisions. An unqualified right of set-off offended the Act and Scheme and therefore had to be construed consistent with the Act and Scheme or be struck down as unenforceable.
Issue 4: Severance
ESG sought an order that the part of the Second Adjudication Decision in which BHL was awarded £100 compensation pursuant to the Late Payment of Commercial Debts (Interest) Act 1998 be severed on the ground that the adjudicator had no jurisdiction to award this sum. It said that BHL's entitlement to claim compensation under the Act had already been decided (in the negative) in the First Adjudication.
Issue 3: Joinder of disputes
A provision in the Contract allowed the adjudicator to determine more than one dispute at the same time at the option of ESG. That unilateral right of joinder was inconsistent with paragraphs 8 and 20 of the Scheme which allowed multiple disputes with the consent of all parties.
Where part of an adjudication award is held to be unenforceable, the court has power to sever that
As the judge put it:
[6] Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) 2019] EWCA Civ 27 [7] Ferson Contractors Limited v Levolux AT Limited [2003] EWCA Civ 11 [8] Thameside Construction Co Ltd v Stevens [2013] EWHC 2071
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