Case 1: The Fraserburgh Harbour Commissioners v McLaughlin & Harvey Ltd [2021] CSIH 58 (6 October 2021) extend Fraserburgh harbour. They alleged defects in the works and commenced proceedings in court (because of possible limitation issues – “prescription”) claiming over £7m in damages. Pursuer engaged Defender to The contract was NEC3 2005 with 2006 amendments Option W2.1(1) contains a “cascade of dispute resolution”. Clause W2.4(1) reads: “W2.4 (1) A Party does not refer any dispute under or in connection with this contract to the tribunal unless it has first been decided by the Adjudicator in accordance with this contract.” Was clause W2.4 a procedural bar to the bringing of proceedings in court not previously been referred to adjudication followed by a notice of dissatisfaction under W2.4(2)?
given although the had not been argued. Lady Wolffe cited the finding of Edward-Stuart J in Anglian [2] that a provision in identical terms was not a fetter on the “valuable” right to adjudicate “at any time” (i.e. at a time of his choosing).
In a reclaiming motion by the Pursuer, the CSIH held:
The contract terms did not prevent the Pursuer from raising a court action. Raising the court action was not a breach of the term. The defender was entitled to enforce the ADR requirement and insist that the dispute was first referred to adjudication. The court would enforce that agreement and would not enter upon the merits of the dispute unless and until the ADR failed to resolve it. Otherwise the court’s competence to entertain the action was not affected. It was in fact competent, and practical (to prevent prescription) but could “not be pressed to a conclusion at present”. The arbitration might fail or court support needed. The correct course was to sist (stay) the action noting it was now the defenders not the pursuers who were objecting to the action continuing. If the effect of English case law was that adjudication was a prerequisite to commencing an action in court, their Lordships disagreed and found that the failure to adjudicate only prevented the court from reaching a final determination in the interim. Comment It appears there may be a divergence here between English and Scottish case law to this extent: that an action may be entertained before adjudication though not allowed to proceed to final determination until adjudication, if insisted upon, has taken place. The Scottish approach seems perfectly sensible. It has since been followed in a later case [3] by Lord Tyre.
At first instance{1} Lady Wolffe decided:
Meaning and effect of clause W2.4 was clear. Parties had agreed to resolve disputes in a specified way, with the merits to be finally determined by arbitration. The clause was not a fetter on the basic statutory right to refer a dispute to adjudication “at any time” in section 108 of the Act. The court accepted the provision operated as a procedural bar on the right to litigate or arbitrate before there had been an adjudication and a notice of dissatisfaction
[1] (2021] CSOH 8 (26 January 2021) [2] Anglian Water Services Ltd v Laing O’Rourke Utilities Ltd [2010] EWHC 1529 (TCC) [3] Greater Glasgow Health Board vs Multiplex Construction Europe Ltd and others [2021] CSOH 115 (5 Nov 2021) 3
Made with FlippingBook Digital Publishing Software