The claimant (contractor) sought payment for work done. He had entered into a building contract with the defendant (employer) for the provision of further accommodation at the defendant’s hotel. The contract incorporated the terms of the JCT 1980 edition and amendments to the standard form were made, in particular in relation to the applicable final dispute resolution procedure.

Having been invoiced by the claimant, the defendant gave notice to withhold payment on various grounds relating to the quality of the claimant’s work. The claimant notified the defendant of his intention to refer the dispute to adjudication. The defendant then sent a fax in which he agreed to pay accordingly to the invoice. The claimant wrote back stating that he would not proceed with the adjudication. Three days later, the defendant informed the claimant that he would still consider his notice to withhold money as valid. The claimant proceeded with the adjudication.

Two issues arose. On the one hand, what form of dispute resolution was agreed between the parties. Second, had a compromise been reached to the effect that the defendant had promised to pay the sum without any deduction and the claimant had promised not to proceed with the adjudication.

HHJ Wilcox QC held as to the former issue that the (in his opinion poorly drafted) contract reflected the parties’ intention to provide for adjudication and legal proceedings but not for arbitration.

In respect of the second issue he found that there was a binding compromise agreement. He held that an exchange of mutual promises was good consideration and that the promise not to adjudicate was a promise of good value. However, as the defendants had repudiated the agreement, the claimants were entitled to refer the dispute to adjudication.