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High Court's construction-award rejection a first

A recent High Court decision is believed to be the first in which the court has refused to enforce a decision made by an adjudicator under the Construction Contracts Act 2013. 

The act set up a process aimed at settling payment disputes in the construction sector more quickly. 

In the case of Tenderbids Limited v Electrical Waste Management, the respondent challenged the enforcement of an adjudicator’s award of just over €1.5 million to the applicant after a dispute between the parties. 

The applicant had purported to deliver notice of the intention to refer the dispute to arbitration by email, but the court noted that the parties to the relevant construction contract had agreed in writing that such notices were to be delivered by registered post.

The respondent did not participate in the arbitration process and argued that failure to deliver the notice by registered post had invalidated the entire process. 

No ‘implied waiver’ 

Mr Justice Garrett Simons found that the notice of intention to refer the dispute to adjudication was not delivered in the way that had been agreed between the parties under the construction contract. 

“The parties expressly agreed in writing that all notices arising under the Construction Contracts Act 2013 (other than payment-claim notices) shall be delivered by registered post. The legislation requires that this choice must be respected,” the judgment stated. 

The judge added that the use of email for other day-to-day communications between the parties could not constitute “an implied waiver” of the requirement to use registered post under the contract. 

He concluded that the purported adjudicator’s award was “a nullity” and that the enforcement application must be refused. 

‘Adhere to express conditions’ 

Lawyers at Philip Lee said that the judgment did not represent a shift in judicial support for statutory adjudication. 

“The judgment is a reminder of the importance of understanding and complying with express terms of the construction contract as agreed between parties and the court’s endorsement of the provisions of the 2013 act itself,” they stated. 

Eversheds Sutherland described the court’s decision as “very significant”. 

“It should be a warning notice to all claimants under the act that failure to adhere to the express conditions, particularly where they are condition precedents, will result in the adjudication being set aside as a nullity and the award will not be enforceable,” the firm’s lawyers said.