Alstom Signalling Ltd. (t/a Alstom Transport Information Solutions) v Jarvis Facilities Ltd

An adjudicator’s decision is binding only until the underlying dispute is finally determined. A party may obtain that determination before enforcement, and prior compliance does not waive the right to challenge the decision without clear evidence of estoppel or waiver.

Under a construction payment mechanism, the amount due is the amount properly assessed and certified under the contract, not automatically the amount claimed. Questions and queries may affect valuation, but a withholding notice concerns sums otherwise due and does not determine the contractual valuation. A final payment date may validly be fixed by reference to a readily recognisable future event, including a certificate under a superior contract.

Alstom and Jarvis were parties to a subcontract for signalling and telecommunications works on the Sunderland Direct Project. Disputes arose over interim payment applications, the operation of the contractual payment machinery, withholding notices, and the amount due under the subcontract.

An adjudicator decided that Alstom had failed to raise sufficiently specific questions and queries and had failed to serve an effective withholding notice. He directed payment of the sums claimed by Jarvis. Alstom commenced proceedings challenging the adjudicator’s decisions and seeking declarations concerning the subcontract price and payment applications. Jarvis brought separate proceedings to enforce the later adjudication decision and applied for summary judgment. The central issues were whether the Scheme applied, what amount was due, whether a withholding notice was required, and whether the adjudicator had determined the dispute he was authorised to decide.

1. Adjudication and final determination. The policy requiring adjudicators’ decisions to be honoured applies only to decisions validly made within the adjudicator’s authority and in accordance with basic procedural fairness. Section 108(3) of the Housing Grants, Construction and Regeneration Act 1996 makes the decision binding until final determination. A party may challenge it after complying with it, unless clear evidence establishes estoppel or waiver. Where a legal issue can be finally determined promptly, the court may determine it before or together with an enforcement application in accordance with the overriding objective.
2. Payment dates. Schedule F provided an adequate mechanism for determining when payment became due and fixed the final date at seven days after the relevant Railtrack certificate. A final date may be fixed by reference to a readily recognisable future event, including action by a third party. The Scheme therefore did not apply to supply a final date.
3. Amount due. The subcontract required Alstom to assess the application, consider questions and queries, and issue a certificate showing how the certified sum had been calculated. The amount due was therefore the amount Alstom properly certified, acting reasonably and objectively, rather than the amount claimed by Jarvis. The contractual procedure could be used to establish the true amount even where no withholding notice had been served.
4. Subcontract price. The Scheme’s reference to the “contract price” meant the entire final sum payable for the work, determined by examining the subcontract, the work executed and the sums payable under the contractual payment provisions. The target cost summary was a basic budget capable of adjustment and was not an immutable ceiling.
5. Applications 31 and 32. The adjudicator failed to determine what was actually due and instead treated the full sums claimed as payable. His decisions were therefore invalid to that extent. Alstom was entitled to declarations concerning application 32, including the alternative declaration relating to the Jackson Eve Rail sub-subcontract. Jarvis was not entitled to summary judgment or enforcement of the adjudicator’s decision. The question of any further recovery in respect of application 31 required separate investigation.