Too late to adjudicate?

23 July 2012

Worthingtons Solicitors Belfast provide legal advice on the importance of considering should be given to whether a contract allows for an alternative form of dispute resolution

Too Late to Adjudicate ?

When faced with litigation arising from a contractual dispute, it is important to consider whether the contract provides for an alternative form of dispute resolution, such as adjudication which could minimise costs and provide for a speedier resolution. Even in situations where court proceedings have been issued, it is worth reconsidering whether any contractual provision for dispute resolution might still be invoked.

In a recent Northern Ireland case, Abbas (Sam) and Hayes (Anthony) trading as AH Design v Rotary (International) Ltd [2012] NIQB 41, the Commercial Court was asked by the Defendant to stay ongoing court proceedings to allow the parties to consider adjudication, which was a remedy provided for in the contract between the parties. Ultimately the Judge focused on two reasons for not ordering a stay; first, as one element of the claim might be construed as falling outside the contract, then parallel adjudication and litigation might result and this would only serve to increase costs and waste time.

Secondly, as there was no attempt to refer the dispute to Adjudication post letter of claim, or earlier in proceedings, no stay was ordered.

This case highlights that in certain circumstances the courts will consider staying litigation to allow other contractual remedies, such as adjudication to proceed. However, any such request should clearly be acted upon in a timely manner and even if litigation is commenced, the litigation may be stayed if the alternative remedy is invoked at an early stage.

David Wilson, Partner in Worthingtons Solicitor Commercial department, advises commercial and institutional clients and private investors on all aspects of commercial property.

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