A quick guide to challenging the enforcement of an adjudicator's decision

This quick guide, one of a series by PLC Construction, explains the steps a party can take to resist enforcement of the adjudicator’s decision, including reserving its position on jurisdiction. It also explains how to challenge an adjudicator’s decision, including for a breach of natural justice.

What steps can I take to resist enforcement of the adjudicator’s decision?

If the adjudicator orders the payment of a sum of money to one party, the Technology and Construction Court (TCC) will enforce that decision unless the paying party can persuade the court that:

• The adjudicator had no jurisdiction to make the decision.
• There was a serious breach of the rules of natural justice (natural justice is the right to a fair hearing, by an impartial tribunal).

The paying party must consider whether it can establish grounds to resist enforcement of the adjudicator’s decision.

Step 1: Did the paying party reserve its position?

If the paying party wants to challenge the adjudicator’s jurisdiction, it should check whether it reserved its right to challenge the adjudicator’s jurisdiction, when the notice of adjudication was served, or later, when it became aware of the event giving rise to the reservation of rights. It may have done this with a general reservation or with a specific reservation. The paying party should also have stated that any further involvement was without prejudice to that objection.

If no reservation of rights was made, the court is unlikely to entertain the jurisdiction argument later. By staying silent, a party may be taken to have waived its right to object.

Step 2: Establishing a ground to challenge enforcement

If the adjudicator had no jurisdiction to determine the dispute, or there has been a material breach of the rules of natural justice by the adjudicator, the paying party may persuade the court not to enforce the adjudicator’s decision.

Did the adjudicator lack jurisdiction to make the decision?

Jurisdiction challenges include:

• The contract was not in writing.
• The contract was not a construction contract.
• The adjudicator’s appointment did not comply with the adjudication procedure rules or the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649) (Scheme for Construction Contracts 1998).
• The dispute had not crystallized.
• The dispute referred to the adjudicator was different to the dispute that had crystallized.
• The dispute referred to adjudication was the same or substantially the same as a dispute already decided by an adjudicator.
• The adjudicator did not determine the dispute referred to him.
• The adjudicator failed to reach the decision within the required time.
• The adjudicator imposed a pre-condition on the publication of his decision.

Did the adjudicator breach the rules of natural justice?

Examples of a breach of the rules of natural justice include the adjudicator’s failure to:

• Consult with both parties about: communications from one party; his approach to the dispute; taking advice from a third party; or relying on a report he commissioned.
• Give a party sufficient time to respond to a submission or evidence.
• Take into account submissions from one party.
• Give reasons for the decision (if requested or required).

What arguments are unlikely to prevent enforcement?

The following grounds for challenging an adjudicator’s decision have been rejected by the courts and are unlikely to succeed:

• The dispute is too complex for adjudication.
• Enforcement proceedings should be stayed pending the decision in a cross adjudication, or to allow the parties to mediate.
• The matter will be referred to arbitration or litigation.

Step 3: Is there anything else I can do to stop the adjudicator’s decision being enforced?

In certain circumstances, the paying party may apply to the court for a declaration under CPR Part 8.

There are also three alternative means of resisting enforcement. These are not commonly used, are less effective and generally not to be recommended. However, the paying party may:

• Apply to the court for a mandatory injunction.
• Apply to the court for a stay of execution.
• Issue a statutory demand.

Step 4: What happens if the challenge to enforcement fails?

The paying party will have to pay the successful party the amount of the adjudicator’s decision. It may also have to pay interest on this sum (if it was claimed in the enforcement proceedings), and both parties’ costs of the enforcement proceedings.

As adjudication is an interim measure, the paying party may start court or arbitration proceedings, to have the matter finally determined.