Stewart & Shields Ltd (Contractor) entered into a contract with Charles Henshaw & Sons Ltd (Sub-contractor) to supply and install screens, windows, etc at Gartnavel Royal Hospital Chapel in Glasgow. Contractor failed to pay part of the Sub-contractor’s interim application where Sub-contractor subsequently referred Contractor’s withholding to adjudication. Adjudicator’s decision was in favour of the Sub-contractor who was the designer, manufacturer, and installer of architectural metalwork and glazing systems in relation to an interim payment under a contract. However, the Contractor failed to pay the sums and the adjudicator's fee. Sub-contractor raised an action in the sheriff court seeking payment.

Contractor appealed against interlocutors of the sheriff enforcing the decision of the.; adjudicator. The parties agreed that the issue was whether the adjudicator had jurisdiction to determine the dispute referred to him by the Contractor in respect of the contract. In the first application by the Contractor, the Sheriff Principal M M Stephen refused the appeal.

Sheriff Principal outlined that the adjudicator is open to interpret the contract where the decision on jurisdiction covered both jurisdiction and substance. Adjudicator’s decision was held to be not clearly categorised as plainly wrong. Court held that a valid challenge to an adjudicator's determination based on a submission that he had exceeded his jurisdiction should only occur when it is plainest of cases. Applying realistic and practical approach to the wording of the product specification, it was held to allow variation.

Subsequent to Sheriff Principal Stephen’s decision in February 2014, the Contractor appealed the decision. Firstly, the Contractor argued that, in accordance to Carillion Construction[1] case, consideration of challenges to an adjudicator's determination applied only to challenges on grounds of natural justice. Further, the issue determined by the adjudicator had arisen under some other contract and not under the terms of the subcontract, as it contained a clause stating that any variations would be subject to a requote. Thus, it did not permit variations and the items in dispute did not amount to works thereunder, and adjudicator's determination was ultra vires. Court of Session, Extra Division of Inner House, refused the appeal.

The court reiterated that there is a limited class of cases where it will refuse to enforce an adjudicator's decision based on breach of natural justice or where the adjudicator had no jurisdiction. Further, it was outlined that the Contractor's appeal was “wholly lacking in substance" and delayed payment to the Sub-contractor for many months.

Despite court’s simple review of existing rules on adjudication enforcement, the court outlined its guidance on the term “any variations would be subject to a re-quote" in a building contract. As a renovation contract, the court held that it was contrary to the parties’ intentions and a "ludicrous proposition" to allow the works to be stopped and re-tender. Thus, this case would prove to be useful in cases where the actual work done is different to the items estimated but cannot be considered outside the terms of the contract.

[1] Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358, [2006] B.L.R. 15