Interserve sought summary judgment in order to enforce an adjudicator’s decision. The defendant argued that they were entitled to withhold payment because they were pursuing a further adjudication, and they reasonably intended to recover an equivalent sum in that subsequent adjudication.

Rule 4 of the CIC Model Adjudication Procedure provided that:

“The Adjudicator’s decision shall be binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.”

Cleveland Bridge argued that exceptionally clear words must be used in order to remove a right of set off (Modern Engineering v Gilbert Ash [1974] AC 689). Further that Section 49(2) of the Supreme Court Act 1981 provided that every court must give effect to all legal rights of whatever nature subject to all claims and demands of whatever nature. However Section 49(2) “subject to the provisions of any other Act”.

The Honourable Mr Justice Jackson held that those words in Section 49(2) of the Supreme Court Act 1991 took effect subject to the 1996 HGCRA. Sections 110 and 111 imposed limitations on what could be withheld from payments due under a construction contract. Even in a situation where there were successive adjudications, then:

“At the end of each adjudication, absent special circumstances, the losing party must comply with the adjudicator’s decision. He cannot withheld payment on the ground of his anticipated recovery in a future adjudication based upon different issues. I reached this conclusion both from the express terms of the Act, and also from the line of authority referred to earlier in this judgment” (paragraph 43).

The award should therefore be enforced, and a stay of execution would not be granted. The case of William Verry Limited v Northwest London Communal Mikvah [2004] 1 BLR 308 was based upon special circumstances, and there would be no delay in drawing up the order in respect of this judgment in respect of his judgment.

However, the adjudicator’s decision in respect of these was incorrect and would be severed from the decision. The adjudicator decided that Cleveland should pay eighty percent of his fees and expenses. However Clause 10 (B) of the Model Adjudication Procedure provided that each party would bear their own cost expenses of any adjudication and “shall share the costs and expenses of the adjudicator equally, whatever the result of the adjudication”. Subsequent correspondence written by one party after the event could not enlarge the adjudicator’s decision.

In respect of interest, it would continue to accrue after the date of the decision until the date for payment at the rate decided by the adjudicator.