Myerson's Commercial Litigation team has successfully acted for a leading provider of professional infrastructure and managed network services in an adjudication arising from a payment dispute with another contractor on a major Ministry of Defence infrastructure project.
David Jones and James Griffiths of the Commercial Litigation team led the matter.
The adjudication concerned a number of unpaid payment applications and raised complex issues relating to the Construction Act, the Scheme for Construction Contracts, payment notices, pay less notices, contractual payment mechanisms and estoppel.
One of the key advantages of adjudication is its speed.
Within just 28 days, our client obtained a binding decision in its favour, demonstrating how adjudication can provide businesses with a rapid and cost-effective route to resolving payment disputes and protecting cash flow without the delay and expense often associated with court proceedings.
Key Issues in the Adjudication
Despite numerous technical challenges being advanced by the responding contractor, the Adjudicator found overwhelmingly in our client’s favour, determining 10 of the 11 substantive issues before him in our client's favour.
A key issue concerned changes to the parties' payment arrangements during the project.
The Adjudicator accepted our client’s case that the parties had adopted a revised approach to payment applications and concluded that the responding contractor was prevented from challenging the format of those applications after previously accepting and paying applications submitted in the same way.
The Adjudicator also accepted our client’s arguments that the contractual payment mechanism had ceased to operate effectively after the final contractual application date, that the Scheme for Construction Contracts should be implied to provide the necessary statutory payment regime, and that contractual provisions making payment conditional upon the submission of compliant invoices were inconsistent with the Construction Act.
The Outcome
Given the successful award in our client's favour, it can now take advantage of the expedited enforcement procedures available through the Technology and Construction Court.
Courts routinely and robustly enforce adjudicators' decisions under the well-established "pay now, argue later" principle.
Enforcement proceedings are typically fast-tracked and commonly listed within six to eight weeks, giving successful parties a swift route to convert an adjudicator's award into an enforceable court judgment if payment is not forthcoming.
This outcome demonstrates both the effectiveness of adjudication as a rapid dispute resolution mechanism and the strength of the statutory payment protections available to contractors operating on major construction and infrastructure projects.
Need advice on a construction payment dispute?
If your business is facing unpaid payment applications or a dispute arising from a construction or infrastructure project, our experienced Commercial Litigation team can help. We advise on adjudication, payment disputes and the statutory protections available under the Construction Act.
Contact our Commercial Litigation team today to discuss how we can help protect your position and resolve your dispute quickly and effectively.
0161 941 4000
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James Griffiths
Associate
James is an Associate in our Dispute Resolution team. James has specialist expertise in complex contractual disputes, shareholder/partnership disputes, professional negligence disputes, claims under s423 Insolvency Act 1986 and commercial agency claims.
About James Griffiths