The Supreme Court stated as follows:
Disputed cross-claims needed to be resolved as a prelude to a final set-off account where all the claims arise under the same construction contract. Even if they arise under more than one construction contract, the adjudicator would be better placed than most liquidators to resolve them. The Scheme contains provision whereby that may be achieved by consent, and the need to take cross-claims into account as defences (by way of set-off) may well mean that there is in reality one single dispute. It was no answer to the utility (rather than futility) of construction adjudication in the context of insolvency set-off to say that the adjudicator’s decision was unlikely to be summarily enforceable. The court was well- placed to deal with such difficulties as might arise at the summary judgment stage, refusing it in an appropriate case as a matter of discretion, or by granting it, but with a stay of execution. So, no need for an injunction, still less a need to prevent the adjudication from running its speedy course, as a useful means of ADR in its own right. Furthermore summary enforcement would not be inappropriate in every case e.g. no dispute about the cross-claim; claim may be found to exist in a larger amount, so that judgment could be given for the balance. Or the disputed cross-claim is found to be of no substance. Or, if the cross-claim can be determined by the adjudicator, because the claim and cross- claim form part of the same “dispute” under the contract, and the adjudicator is able to determine the net balance.
Adjudication
was
intended
(absent
agreement) to be costs neutral
As a starting point, the insolvent company has both a statutory and a contractual right to pursue adjudication as a means of achieving resolution of any dispute arising under a construction contract to which it is a party. Even if the dispute related to a claim affected by insolvency set-off, it would ordinarily be entirely inappropriate for the court to interfere with the exercise of such rights, save very exceptionally That very steep hurdle was not surmounted in this case. In the context of construction disputes adjudication was always intended to be and has become a mainstream method of ADR, leading to the speedy, cost effective and final resolution of most of the many disputes that are referred to adjudication. That was an end in its own right, even where summary enforcement might be inappropriate or for some reason unavailable As to ‘Incompatibility’ of the adjudication process with the insolvency set-off regime the court had this to say: “There is no basis for concluding that this beneficial means of dispute resolution is incompatible with the insolvency process, or with the requirement to deal with cross-claims in insolvency by set-off, still less an exercise in futility. The process of proof of debt in insolvency shares many of the attractive features of adjudication (speed, simplicity, proportionality and economy) with the added advantage that a construction dispute arising during insolvency could be more amenable to resolution by a professional construction expert than by many liquidators.”
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