The Scottish courts have once again emphasised that they will only refuse to enforce adjudication decisions in “a very limited class of case”.  The case is the first reported Scottish decision in nearly 10 years from this level of appeal court on the enforcement of adjudicator’s decisions and has underlined the uniformity of approach between the Scottish and English courts.  The judgment emphasises that the underlying purpose of adjudication should not be derailed by arguments of a technical legal nature. 

The case concerned a sub-contract for the supply and installation of glazed screens, windows and curtain walling at Gartnavel Hospital in Glasgow.  The parties fell into dispute when an interim application for payment by Henshaw was refused (in part) by Stewart and Shields. 

The sub-contract included a “Technical and Scope of Works Clarifications”, of which clause 27 stated:

“Due to conflicting information between drawings, bill of quantities and specifications, we would advise you that we have quoted for sizes, quantities and details as described in the above estimate.  Any variations would be subject to a re-quote”.

Relying on this clause, Stewart and Shields argued that 9 items within the application were variations subject to some other contract and so refused to pay for them.  Henshaw referred the dispute to adjudication.  The Adjudicator found in Henshaw’s favour, but Stewart and Shields refused to pay up. 

In subsequent enforcement proceedings (brought by Henshaw in the Sheriff Court) the decision of the Adjudicator was again upheld.  Stewart and Shields once more refused to pay and appealed the decision twice, losing at each stage.

In the last appeal, the central issue was whether or not the Adjudicator’s decision was in respect of an issue arising out of the sub-contract.  Stewart and Shields argued that:

  1. The 9 items for which payment was refused constituted variations, they were not in writing and related to some other contract than the one referred to adjudication; and
  2. The terms of clause 27 were such that variations to the contract were not permitted and accordingly every alteration to the contract would require a re-quote and therefore a fresh contract.

The court rejected Stewart and Shields’s arguments and dismissed the appeal.  It was highly critical of what they saw to be a “ludicrous proposition” that two commercial parties would submit themselves to a re-tendering process every time an amendment to the figures in the Bill of Quantities was required. 

Instead, the Court followed the wealth of authority showing the judiciary’s reluctance to accept technical legal challenges to adjudicators’ decisions.  It confirmed that the courts will only overturn adjudicators’ decisions where the adjudicator had no jurisdiction or where there has been a clear breach of natural justice:

“[17]…Thus, the adjudication procedure ought not to be derailed by the pursuit of technical legal arguments, particularly where those arguments are patently without merit.  [18] We are, accordingly, disappointed, to say the least, to find that that that is precisely what has occurred in the present case”.

Whilst not a new point of law, this decision helpfully and clearly underlines that the courts will maintain a critical approach to technical challenges to adjudicators’ decisions.

Reference: Charles Henshaw & Sons Limited v Stewart & Shields Limited [2014] CSIH 55