Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd No 2

When the court enforces an adjudicator’s decision, the cause of action is contractual: it arises from failure to comply with the adjudicator’s decision, whether that decision is right or wrong. The court’s discretion to award interest under section 35A of the Supreme Court Act 1981 is therefore confined to the period between the date on which that enforcement cause of action arose and the date of judgment. Where the adjudicator has already awarded interest up to a specified date and continuing interest thereafter, the court will ordinarily enforce that interest provision rather than retrospectively award interest from the earlier date on which the underlying contractual sum became due.

The claimant contractor obtained an adjudicator’s decision requiring the defendant employer to pay £1,303,704.95 plus VAT, interest and the adjudicator’s fees and expenses. In an earlier judgment, the court held that the adjudicator had jurisdiction and that the decision was enforceable.

On dealing with interest, the court considered whether it could award interest under section 35A of the Supreme Court Act 1981 from the date when the underlying interim payment became contractually due, rather than from the date when the defendant failed to comply with the adjudicator’s decision.

1. Enforcement cause of action. The enforcement of an adjudicator’s decision is contractual. The relevant contract required the parties to comply with the adjudicator’s decision. That obligation applied whether the decision was right or wrong. Failure to pay the adjudicated sum was therefore a breach of the contractual obligation to comply with the decision.
2. The claimant’s cause of action was not a claim for the underlying interim payment debt under the payment provisions of the contract. It was a claim arising from the defendant’s failure to honour the adjudicator’s decision.
3. Interest discretion. Section 35A(1) of the Supreme Court Act 1981 gave the court a discretion to award simple interest, but the permissible period ran from the date on which the enforcement cause of action arose to the date of judgment. The cause of action arose when the defendant failed to make the payment ordered by the adjudicator.
4. The adjudicator had ordered payment no later than 21 August 2007. The enforcement cause of action therefore arose by 22 August 2007. Because the adjudicator had already quantified interest to 21 August 2007 and ordered continuing daily interest thereafter, that interest was allowable up to payment.
5. The parties’ agreed order was made accordingly: interest of £42,004.48 to judgment, followed by interest at £375.04 per day from 24 October 2007 until payment.

The judgment followed an earlier judgment in the same proceedings which held that the adjudicator had jurisdiction and that the adjudicator’s decision was enforceable. The present judgment determined the consequential issue of interest.