An adjudication decision on a JCT Trade Contract dealt with an interim valuation of completed works, including variations, and liability for contra charges and liquidated damages. But was the decision (and, if so, to what extent) binding on the parties in the ongoing final account process and any further adjudication, pending final resolution of the adjudicated matters, by legal proceedings or settlement?

Extension of time claim

Although an adjudication decision is temporarily binding on the parties, in the absence of any contrary agreement it does not affect their underlying contractual rights and obligations, or displace the agreed contractual procedures for determining those rights and obligations. An adjudicator has no jurisdiction to determine matters which are the same, or substantially the same, in a subsequent adjudication and, once a disputed extension of time claim has been determined in adjudication, the same dispute cannot be referred to a subsequent adjudication. The adjudication decision did not, and could not, however, override the Trade Contract mechanism requiring a subsequent assessment of the Completion Period by the Construction Manager following practical completion, with the potential to produce a different result (in terms of any liability of the Trade Contractor for liquidated damages and finance charges).

Final Trade Contract Sum

Although the adjudicator did not determine the Final Trade Contract Sum, it did not necessarily follow that the Adjudication Decision could not bind the Construction Manager, in respect of specific matters determined by the adjudicator, in ascertaining the Final Trade Contract Sum. Unlike the review of the Completion Period, calculation of the Final Trade Contract Sum did not require the Construction Manager to remeasure the works. The Trade Contract provided that effect should be given, in calculating the Final Trade Contract Sum, to agreed variations and their valuation, including consequent direct loss and/or expense, and it did not provide for these matters to be re-opened at the final account stage. If, and to the extent that, the adjudication decision had determined any contractual entitlement to a variation or its value, the determination was binding (pending any final resolution by litigation or settlement) on the parties for the purpose of the Final Trade Contract Sum.

And a determination by the adjudicator on a discrete issue decided in the adjudication decision was binding on the parties, pending any final resolution by litigation or settlement. A careful analysis was required to ascertain whether any claim to be advanced was subject to a binding decision by the adjudicator. Regard must be had to the basis of the claim made, whether it amounted to a new cause of action and whether it was permitted under the contract.

Essential Living (Greenwich) Ltd v Elements (Europe) Ltd [2022] EWHC 1400