South West Contractors Ltd v Birakos Enterprises Ltd

In enforcing an adjudicator’s award, the court should adopt a rigorous and commonsense approach to whether a dispute has arisen. It should examine the substance of a claim and its denial rather than the labels used by the parties. An adjudicator’s decision should be respected and enforced unless it is plain that the wrong question was decided or the adjudicator’s process was obviously unfair. The court should not minutely examine reasons to identify a possible error. Challenges based on jurisdiction or natural justice are exceptional. A party dissatisfied with the decision should ordinarily pay it and pursue final proceedings if necessary.

The claimant sought summary judgment under CPR Part 24 to enforce an adjudicator’s award arising from a separate fee contract for project-management services. The defendant challenged the adjudicator’s jurisdiction, contending that no dispute had arisen, and alleged breaches of natural justice based on the alleged failure to consider mitigation and set-off arguments.

The court considered whether the parties’ correspondence had established a dispute and whether the adjudicator’s reasoning justified refusing enforcement.

1. Summary judgment granted. The claimant was entitled to enforce the adjudicator’s award. The defendant had paid none of the sums awarded, including the adjudicator’s fees.
2. The jurisdiction challenge failed. A dispute existed because the claimant had clearly claimed payment under the fee contract and the defendant had failed to pay and had denied liability. The proper approach was rigorous and commonsense. The court had to consider the substance of the claim and denial, rather than the descriptive labels used by the parties, following All In One Building and Refurbishments Ltd v Makers UK Ltd, [2005] EWHC 2493 (TCC).
3. The alleged failure to consider mitigation did not justify withholding enforcement. Although the second award did not expressly address mitigation of the profit claim, the adjudicator had considered two connected adjudications involving the same transaction and common submissions. Having regard to the careful treatment of the claims and defences as a whole, it was unlikely that the mitigation issue had been ignored.
4. The court should not minutely examine an adjudicator’s reasons to identify a possible mistake. The statutory scheme required enforcement unless it was plain that the adjudicator had decided a question not referred or had acted in an obviously unfair manner. Such intervention was reserved for rare cases, in accordance with Carillion Construction Ltd v Devonport Royal Dockyard, (2005) 1 BLR 324.
5. There was no set-off issue. The alleged set-off depended on the defendant’s case that the claimant had repudiated the contract. The adjudicator had considered and rejected the allegations supporting that case, so no set-off arose.