The Act says nothing at all about enforcement. Section 108(3) requires the contract to provide that the adjudicator's decision is binding, at least temporarily:
`108±(3) The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.'
This does not however give any clue to the successful party in the adjudication as to how it is to oblige its opponent to comply with the adjudicator's decision.
The Scheme, which of course only applies if the contract fails to meet the requirements stated in the Act, includes the term that the Act required, and goes further:
`23±(1) In his decision, the adjudicator may, if he thinks fit, order any of the parties to comply peremptorily with his decision or any part of it.
(2) The decision of the adjudicator shall be binding on the parties, and they shall comply with it until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbi-tration) or by agreement between the parties.
24. Section 42 of the Arbitration Act 1996 shall apply to this Scheme subject to the following modifications ±
(a) in subsection (2) for the word ``tribunal'' wherever it appears there shall be substituted the word ``adjudi-cator'',
(b) in subparagraph (b) of subsection (2) for the words
``arbitral proceedings'' there shall be substituted the word ``adjudication'',
(c) subparagraph (c) of subsection 2 shall be deleted, and (d) subsection (3) shall be deleted.'
It is therefore necessary to turn to the Arbitration Act 1996 to see whether it is of assistance. Modified in accordance with paragraph 24 of the Scheme, section 42 reads thus:
`42. Enforcement of peremptory orders of tribunal
(1) Unless otherwise agreed by the parties, the court may make an order requiring a party to comply with a peremptory order made by the tribunal.
(2) An application for an order under this section may be made ±
(a) by the adjudicator (upon notice to the parties),
(b) by a party to the adjudication with the permission of the adjudicator (and upon notice to the other parties), (c) [deleted]or
(3) [deleted]
(4) No order shall be made under this section unless the court is satisfied that the person to whom the tribunal's order was directed has failed to comply with it within the time prescribed in the order or, if no time was prescribed, within a reasonable time.
(5) The leave of the court is required for any appeal from a decision of the court under this section.'
Presumably the word `tribunal' in subsection (1) should also have been changed to `adjudicator', but this was missed.
It is not at all clear how it is intended that this apparent ability to apply to the court for an order requiring compliance is supposed to work in the context of adjudication. If the adjudicator has made a peremptory order, and assuming that `tribunal' is taken as meaning
`adjudicator', it seems that either the adjudicator or a party (with the permission of the adjudicator) can make an application to the court.
But what is a `peremptory order'? Is the adjudicator's decision a peremptory order?
Peremptory orders in arbitration are introduced by section 41(5) of the Arbitration Act, which states:
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`(5) If without showing sufficient cause a party fails to comply with any order or directions of the tribunal, the tribunal may make a peremptory order to the same effect, prescribing such time for compliance with it as the tribunal considers appropriate.' A peremptory order in arbitration therefore is a second order requiring compliance with an earlier order. The arbitrator may have required one of the parties to produce a particular document or class of documents for inspection, and when the party fails to do so the arbitrator makes an order stated to be peremptory. The reluctant party then knows that if he still declines to comply, an application to the court may well follow.
It is difficult to apply this to an adjudicator's decision. The adjudicator may have decided that X should pay Y £10,000. That is his decision which is delivered to the parties. If X fails to pay, perhaps Y will go back to the adjudicator and ask for a peremptory order. The adjudicator may well respond that he has given his decision and there is nothing further for him to do. He is functus officio and has no power to make any further orders.
Some adjudicators make a practice of stating that their decisions requiring payment are peremptory orders and that they give per-mission for an application to court, so that the successful party can go straight to court to seek an order for compliance. This avoids the problem of seeking a further order from an adjudicator who no longer has any authority, but it is not a peremptory order as is understood under the Arbitration Act.
There is then a further difficulty for the court in deciding on what sort of order to make in order to require compliance with an adju-dicator's decision. An injunction requiring the reluctant party to make a payment would be an unusual order for the court to make, but there is no obvious alternative apparent from the legislation or the Scheme.
This difficulty was considered, and an answer found, in the first case that came before the courts involving the Act, Macob Civil Engineering Ltd v. Morrison Construction Ltd (Sir John Dyson, Feb-ruary 1999). Macob had succeeded in obtaining a decision of an adjudicator that Morrison should pay them £302,366 plus VAT. The adjudication had been carried out under the Scheme, and the adjudicator had expressed his decision as being a peremptory order. Morrison objected on the grounds of breach of natural justice, and also on the basis that there was an agreement to refer disputes to arbitration. These two arguments, considered later in this chap-ter, were unsuccessful.
Sir John Dyson then considered the problems of dealing with section 42 of the Arbitration Act. He decided that the court could enforce the decision under section 42. There had been argument before him as to whether an injunction should be given, which was the alternative preferred by Macob's counsel, or summary judg-ment ± the preference of Morrison's counsel. Sir John's explanation of the position is helpful guidance as to how this difficult section should be applied, and how applications for enforcement should normally proceed:
`I am in no doubt that the court has jurisdiction to grant a man-datory injunction to enforce an adjudicator's decision, but it would rarely be appropriate to grant injunctive relief to enforce an obligation on one contracting party to pay the other. Clearly, different considerations apply where the adjudicator decides that a party should perform some other obligation, e.g. return to site, provide access or inspection facilities, open up work, carry out specified work etc. . . . a mandatory injunction to enforce a pay-ment obligation carries with it the potential for contempt pro-ceedings. It is difficult to see why the sanction for failure to pay in accordance with an adjudicator's decision should be more dra-conian than for failure to honour a money judgment entered by the court.
Thus, section 42 apart, the usual remedy for failure to pay in accordance with an adjudicator's decision will be to issue pro-ceedings claiming the sum due, followed by an application for summary judgment.'
It seems therefore that the peremptory order approach suggested by paragraph 24 of the Scheme will only be followed where the adju-dicator's decision requires something other than a payment of money. Even then, the potential difficulty of seeking a further peremptory order from an adjudicator who no longer has authority will have to be addressed. Where, as in most cases, the successful party seeks money, the route to be followed will be the issue of court proceedings and an application for summary judgment under CPR Part 24, considered below.
It is only the Scheme that struggles with complexenforcement provisions. Other standard adjudication rules simply state that the parties may seek summary enforcement, thereby indicating that Sir John Dyson's suggested route is to be preferred.
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