Karl Construction (Scotland) Limited v Sweeney Civil Engineering (Scotland) Limited

Tuesday, 22 January 2002

Key terms: 
Reclaiming motion - non-compliant payment provisions - application of the law - natural justice

Karl Construction was a main contractor and Sweeney a sub-contractor. A dispute arose in respect of valuation number 5. The adjudicator decided that in respect of payment provisions the sub-contract was not compliant with the Act and that Sweeney was due the sum of £39,872.24. After the notice of adjudication the parties accepted that the sub-contract was compliant with the Act. Karl argued that the adjudicator was obliged to reach her decision on the basis that the contract complied. The Court did not agree, holding that the adjudicator had no choice but to apply the law, and the parties cannot circumvent the correct application of the law. Second, Karl argued that there was a breach of natural justice on the basis that the adjudicator should have invited representation from the parties before departing from the parties agreed position. Lord Marnoch did not accept that argument. He stated that the process of adjudication was "far removed" from the traditional adversarial process, time was too short, and the adjudicator can take legal advice if he or she so wished. He refused to allow this argument to avoid the implementation of the decision, and so the right to an interim payment. The petition was dismissed.

Key contact

Tel: +44 (0)20 7421 1986
Tel: +44 (0)20 7421 1986