The Trustees of the Marc Gilbard 2009 Settlement Trust engaged OD Developments and Projects Ltd to carry out construction works at a property in London, under the JCT Standard Building Contract (Without Quantities), 2005 Edition, Revision 2 (2009). Following completion of the works, the contract administrator issued a final certificate which required the contractor to pay the employer £232,153.34 plus VAT.

Clause 1.9 of the contract dealt with the final certificate and provided that its issue would be conclusive evidence in respect of a wide range of matters. Clause 1.9.3 provided that:

“If any adjudication, arbitration or other proceedings are commenced by either Party within 28 days after the Final Certificate has been issued, the Final Certificate shall have effect as conclusive evidence as provided in clause 1.9.1 save only in respect of the matters to which those proceedings relate”.

Within 28 days of the issuing of the final certificate, the contractor issued court proceedings under CPR Part 7, challenging the validity and correctness of the final certificate. The claim progressed slowly, and over a year later the contractor sought to commence an adjudication on the same dispute. In response, the employer issued Part 8 proceedings seeking declarations that:

(i) the contractor was contractually barred from adjudicating the dispute; and
(ii) the employer was entitled to hold the amount due pending the conclusion of the Part 7 proceedings.

The court held that the final certificate was conclusive evidence in relation to the adjudication as clause 1.9.3 did not envisage more than one set of proceedings, and business common sense dictated that following the issue of the final certificate, the contract provided for just one set of proceedings that should be started within the 28 day period during which the certificate could be challenged.

It was held that clause 1.9.3 did not fetter the contractor’s right under s.108 of the Construction Act 1996 to adjudicate “at any time”, as had been argued by the contractor in opposition to the application for the above declarations, because it did not say that a party could not adjudicate, but instead defined the evidential value of the final certificate. The contractor had the right to adjudicate within 28 days, but had simply chosen not to. Further, the right to adjudicate “did not provide an unfettered tight to adjudicate regardless of other contractual terms”, and the court did not accept that conclusivity provisions such as clause 1.9.3 offended the Construction Act 1996. The contractor was accordingly barred from adjudicating the dispute.

In relation to the second of the declarations sought by the employer, the court refused to declare that the employer was entitled to hold the amount stated in the final certificate until the conclusion of the Part 7 proceedings. Even if an adjudicator found in favour of the employer, it did not necessarily follow that the court would enforce that decision, and it would also be unusual for the employer to be granted summary judgment in respect of a claim to which the defence (the contractor’s challenge to the final certificate) was detailed in pre-existing court proceedings.