⚖️ Scottish court held that adjudication is a procedure with strict time limits, and therefore the adjudicator is not obliged to give the parties additional time to make submissions on individual issues

Entexol (the claimant), as subcontractor, and Sked (the respondent), as main contractor, entered into a contract for works on a Scottish power grid project (the contract).

The contract provided for the resolution of disputes arising thereunder by way of adjudication. During the performance of the contract, a dispute arose between the parties.

The claimant claimed the respondent to pay for the works carried out. In turn, the respondent filed a counterclaim for compensation of costs, on the ground that the claimant had missed the deadlines for completing the works. According to the respondent, the claimant failed to complete the works by a specific contractual completion date, which was set out in a direction sent to the claimant by email.

The adjudicator rejected the respondent's arguments, holding that time was not of the essence for the performance of the contract ("time was at large").

According to the adjudicator, there was no evidence that the claimant had agreed to any completion date. In particular, the email relied upon by the respondent could not be regarded as a binding direction on the completion date in the absence of the claimant's consent. A binding agreement on the completion date could not be imposed unilaterally by the respondent's direction.

As a result, under the adjudicator's decision, the respondent was ordered to pay the claimant approximately £114,000.

The claimant applied to the Court of Session in Scotland for enforcement of the adjudicator's decision. The respondent opposed enforcement, relying on breaches of the principles of natural justice. According to the respondent, the adjudicator had made a finding that time was at large when the parties had not raised that issue before him. As a result, the respondent was deprived of the opportunity to explain what it considered to be a "reasonable time" in the absence of a fixed date, while the adjudicator had acted "on a frolic of his own".

The judge held that the adjudicator's decision had been made without any breach, noting the following circumstances:

🔘 The adjudicator did not go beyond the issues submitted to him. He merely examined the respondent's argument about a fixed date and, with reasons, rejected it. The adjudicator's statement that time was not of the essence was a logical consequence of the respondent's failure to prove the existence of a fixed date;

🔘 Contrary to the respondent's position, the adjudicator was not obliged to invite the parties to make submissions on the completion date. The judge recalled that adjudication is an accelerated dispute resolution procedure with strict time limits and does not impose an obligation on the adjudicator to give the parties an opportunity to comment further on individual issues. Otherwise, the respondent could have abused its procedural rights.

The judge thus granted the application for enforcement of the adjudicator's decision.

📎 The Scottish court's judgment in English is available here.

TRANSLATED BY AI
Original see here