Final account sign-offs can give essential finality and certainty to contracting parties, who then know precisely where they stand on the bill for the works. Unless, of course, you can stop the finality door closing by putting a metaphorical foot in the way.
A sub-sub-contract for works at Lord’s cricket ground in London required the subcontractor, Atalian Servest AMK, to produce a Final Account Statement of the amount due to the sub-sub- contractor, BWE, and said that the Statement was “final and binding” on BWE, unless the parties agreed to modify it or BWE commenced an adjudication or court proceedings within 20 working days. AMK produced the Final Account Statement and BWE commenced an adjudication and court proceedings challenging the Statement within the time limit, but AMK claimed that the Statement was valid and binding.
In court proceedings, the Scottish appeal court confirmed that it was not. BWE had “their foot firmly in the door” as permitted by the relevant contract clause, by virtue of the adjudication and the timeous, and still pending, litigation. The first adjudicator had resigned but the court said that that did not bring the adjudication to an end. BWE had followed the procedure set out in Scotland’s Scheme for Construction Contracts and served a fresh notice. The two referrals were very similar (though not identical) and the fundamental question remained the same: what sum was properly due? The adjudication continued notwithstanding the fresh notice and the resignation of the first adjudicator did not terminate BWE’s right to challenge the Statement.