An employer took its £5 million claim for liquidated damages to adjudication. The contractor limited its defence to just three relevant events as the basis for extensions of time, but subsequently served a full extension of time claim that it made no formal attempt to include in the adjudication. The adjudicator awarded the employer over £4 million (gross) as liquidated damages but the contractor did not pay. It started a second adjudication which included an allegation that it was entitled to a further extension of time, on the basis of relevant events not referred to in the first adjudication. Could it do that?

The court said it could not. In general terms, an adjudicator cannot sensibly decide an entitlement to liquidated damages without first deciding the contractor’s entitlement to an extension of time. The dispute referred to the first adjudication was a dispute about liquidated damages (and therefore delay) across all sections of the work, including all the employer’s claims for liquidated damages, and all of the contractor’s entitlements to an extension of time. The contractor was entitled to raise all its extension of time claims in the first adjudication, just as it had done in the pre-adjudication correspondence. What it could not do was to defend itself by reference to just a few of the potential relevant events, and keep others back for another day. Asking the adjudicator to change the date that he had decided in the first adjudication would open up the liquidated damages already awarded and the contractor was not entitled to do that. 

The contractor could not restrict the scope of the dispute in the first adjudication but it could, however, raise the additional matters in court proceedings challenging the adjudicator’s decision in that first adjudication. This was really a dispute about the forum for it; there was no risk of the contractor’s substantive rights being affected.

Mailbox (Birmingham) Ltd v Galliford Try Building Ltd [2017] EWHC 1405