Rentokil and Eastend entered into a series of contracts for Eastend to carry out minor engineering works at 15 different sites throughout Scotland and England. As a result of Rentokil’s concerns about defects at 4 sites, Rentokil indicated that they would not be making further payments in relation to any of the sites. Although the contracts were entered into after the Act came into effect, they did not contain any adjudication provisions. Eastend was successful in the adjudications under 3 of the contracts.

Rentokil did not comply with the Adjudicator’s decisions and Eastend commenced enforcement proceedings. Shortly prior to the first hearing, Rentokil’s solicitors paid the full amount of the Adjudicator’s decisions and simultaneously lodged an arrestment in relation to Eastend’s alleged breaches in relation to 13 of the contracts, which included 2 contracts that had been considered in the adjudications. Eastend applied for recall of the arrestment on the grounds it was oppressive.

The Judge recalled the arrestments:

“It is clear that Parliament intended that decisions of adjudicators are binding on parties and must be complied with until the contractual dispute is resolved by litigation, arbitration or agreement. It appears to me to be most obtuse if the pursuers, having participated in an adjudication and made representations on a construction contract, can then circumvent and negate the effect of an adjudicator’s award, where they are not content with it, by raising a court action relating to the same subject matter and arrest the sum awarded on the dependence of the court action thus depriving the defenders of the benefit of the award”.

It was held that protective measures could not be used, in pending court proceedings, as security for claims previously before the Adjudicator. However, protective measures could be used to attach monies, which are being paid over by the same pursuer in implementation of a previous obligation, except where bad faith is shown on the part of the pursuer. This decision was upheld on appeal.