Macob Civil Engineering Ltd v Morrison Construction Ltd 1

United Kingdom

The correct approach to enforce an adjudicator's decision is a claim form and summary judgment. A defendant cannot elect to serve notice of arbitration to dispute the decision and at the same time argue that it is not an enforceable decision.

Dyson J, Technology & Construction Court

12 February 1999

The first case in which the court considered the adjudication provisions of HGCRA. Macob entered into a sub-contract with Morrison to carry out groundworks. Macob alleged that Morrison failed to pay an interim application, and served a notice of adjudication. The contract did not comply with all the requirements of Section 108, and therefore the Scheme applied. The adjudicator found in favour of Macob, and ordered that his decision be complied with peremptorily. Morrison refused to comply, arguing that the decision was invalid and unenforceable, since the adjudicator was guilty of procedural error in conducting the adjudication in breach of the rules of natural justice (it also challenged the decision on the merits). Morrison then gave notice of arbitration of disputes arising out of the adjudicator's decision. Macob sought to enforce the decision by a mandatory injunction; Morrison issued a summons seeking a stay to arbitration.

Morrison argued that a "decision" meant a lawful and valid decision. Therefore, if a decision was challenged then it was not binding or enforceable until it had been determined (by arbitration). The court believed that this argument, if correct, would substantially undermine the effectiveness of adjudication. The intention of Parliament was plain: to introduce a speedy mechanism for settling disputes on a provisional interim basis and requiring the decisions to be enforced. Morrison's challenge on this ground was hopeless. A decision whose validity was challenged was still a decision within the meaning of the Act and Scheme.

Morrison's request for a stay was refused. Morrison could not argue that the decision was a decision for the purposes of being the subject of a reference to arbitration, but not a decision for the purposes of being binding and enforceable pending revision by the arbitrator. The court also noted that there was nothing in Halki Shipping Corporation v Sopex Oils (1998) 1 WLR 726 preventing the court deciding that the defendant was precluded by its election from seeking a stay, but did not give reasons for this.

The court commented that a mandatory injunction would rarely be appropriate for decisions relating to payment (although different considerations would apply where the decision was that a party should perform some obligation, e.g. return to site). Therefore the usual remedy to enforce a decision would be to issue proceedings claiming the sum due and follow this by an application for summary judgment.

The court noted that it was not clear why Section 42 of the Arbitration Act 1996 was incorporated into the Scheme.

As Macob had not claimed a money judgment, the court gave a declaration that the decision was binding and Morrison was required to pay the sums ordered and was now in default.

The correct approach to enforce an adjudicator's decision is a claim form and summary judgment. A defendant cannot elect to serve notice of arbitration to dispute the decision and at the same time argue that it is not an enforceable decision.

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