Case No: HT-14-264

Neutral Citation Number: [2014] EWHC 3193 (TCC)

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
London EC4A 1NL
Date: 10 October 2014
Before :
MR JUSTICE EDWARDS-STUART
--------------------Between :
Peterborough City Council
- and Enterprise Managed Services Ltd

Claimant
Defendant

----------------------------------------Ms. Fiona Sinclair QC (instructed by Pinsent Masons LLP) for the Claimant
Miss Anneliese Day QC (instructed by Dentons UKMEA LLP) for the Defendant
Hearing dates: 29th September 2014
--------------------Judgmen

tMr. Justice Edwards-Stuart:

Introduction
1. This is an application by the Defendant (EMS) for an order to stay the action
brought in this court by the Claimant (the Council) in respect of a dispute arising
out of the contract dated 7 July 2011 made between the Council and EMS by which
EMS agreed to design, supply, install, test and commission a 1.5 MW solar energy
plant on the roof of a building owned by the Council.
2. It was a term of the contract that EMS was to provide plant generating at least 55 kW
by 31 July 2011 in order that the Council could benefit from the higher tariff payable
under the Governments feed-in tariff scheme in respect of the whole installation once
completed. If EMS failed to achieve that target, it is said that the contract provided
that it should pay liquidated damages of just over 1.3 million (known as the Price
Reduction) to the Council.
3. The application is made on the ground that the contract requires any dispute to be
referred to adjudication by a Dispute Adjudication Board (DAB), in this case
consisting of a sole adjudicator, as a precondition of any action in the courts. The
principal issue on this application is whether or not the contract does in fact require
this. If it does, then the question arises as to whether or not the court should order the
Councils action to be stayed.
4. The works were completed in late 2011 and it is alleged by the Council that the plant
failed to achieve the required output, 55 kW, by the stipulated date so that the Council
became entitled to the Price Reduction. The contract provided that in that event the
Council was entitled to recover that sum as a debt.
5. Since the Council had taken the position that EMS failed to achieve the stipulated
power output by the target date, by a notice dated 4 April 2013 it refused to approve
EMSs payment application No. 3. EMSs application was for 658,935. The
Council assesses the value of EMSs executed work as 646,683, so this difference
between the figures is not significant. Accordingly, the real issue between the parties
is whether or not the Council is entitled to the claimed Price Reduction, although it
also claims other sums in addition.
6. On 6 January 2014 the Council sent EMS a pre-action protocol letter of claim, to
which EMS responded by a letter dated 21 February 2014. In that letter EMSs
solicitors took the point that the Council should have referred the dispute to the DAB,
as the contract required, rather than threaten litigation. However, they went on to
suggest that, given the ongoing relationship between the parties, it would be
appropriate to make an attempt at that stage to resolve the dispute at that stage by
mediation.
7. This suggestion was adopted and there was a mediation in May 2014. However, no
settlement was achieved. On 21 July 2014 EMS gave notice under the contract of its
intention to refer the dispute to adjudication.
8. On 11 August 2014 the Council issued and thereafter served its claim form and
Particulars of Claim. On 13 August 2014 its solicitors wrote disputing that it was

obliged to refer the dispute to the DAB. On 26 August 2014 EMS applied to the
RICS (the nominating body named in the contract) for the appointment of an
adjudicator. Mr John Wright, a partner in Goodman Derrick, was duly appointed.
9. On 27 August 2014 EMS issued this application. It was represented at the hearing by
Miss Anneliese Day QC, instructed by Dentons, and the Council was represented by
Ms. Fiona Sinclair QC, instructed by Pinsent Masons. Both counsel made careful,
cogent and persuasive submissions for which I am very grateful.
The contract
10. The contract was made on the FIDIC General Conditions of Contract for
EPC/Turnkey Projects. This is one of a suite of three standard forms of contract
(known as Books) issued by FIDIC in 1999. The other two are Conditions of
Contract for Construction and Conditions of Contract for Plant and Design-Build.
11. Clause 1.1 of the Conditions defines the DAB as:
The person or three persons so named in the Contract, or other
person(s) appointed under Sub-Clause 20.2 [Appointment of the
Dispute Adjudication Board] or Sub-Clause 20.3 [Failure to Agree
Dispute Adjudication Board]

12. The FIDIC Contracts Guide, published in 2000, makes it clear that each Book
describes a dispute resolution procedure which may be applicable to most contracts
for which the Book was intended to be used. But it then goes on to say that the most
appropriate Book may not be the Book which contains the dispute resolution
procedure which is to be preferred. As one might expect, therefore, the parties have
the choice of choosing a dispute resolution procedure other than that in the Book
which otherwise appears most appropriate to their particular project. The Conditions
of Contract for Construction provide for a full-term standing DAB, where the
member or members are appointed before the start of the works. The other two Books
provide for the ad hoc appointment of a DAB following the issue by one of the parties
of a notice of intention to refer a dispute to adjudication.
13. Although Ms. Sinclair did not accept this, in my view it is clear that this suite of
contracts provides for two mutually exclusive types of DAB: a standing DAB named
in the contract, or an ad hoc DAB appointed following a dispute. I cannot see how
the contractual provisions can be interpreted or operated so as to permit two types of
DAB to be in existence at the same time, or even to be alternatives.
14. The crucial clauses in the present dispute are sub-clauses 20.2 to 20.8, the relevant
parts of which I will have to set out below at some length:
20.2

Appointment of the Dispute Adjudication Board

20.2.1

Disputes shall be adjudicated by a DAB in accordance with

Sub-Clause 20.4 [Obtaining Dispute Adjudication Boards
Decision]. The Parties shall jointly appoint a DAB by the
date 28 days after a Party gives notice to the other Party of
its intention to refer a dispute to a DAB in accordance with
Sub-Clause 20.4.

20.2.2

The DAB shall comprise, as stated in the Particular

Conditions, either one or three suitably qualified persons
(the members). If the number is not so stated and the
Parties do not agree otherwise, the DAB shall comprise
three persons.

20.2.3

If the DAB is to comprise three persons, each Party shall

nominate one member for the approval of the other Party.
The Parties shall consult both these members and shall
agree upon the third member, who shall be appointed to act
as chairman.

20.2.4

20.2.5

The agreement between the Parties and either the sole

member (adjudicator) or each of the three members shall
incorporate by reference the General Conditions of Dispute
Adjudication Agreement contained in the Appendix to these
General Conditions, with such amendments as are agreed
between them.

20.2.6

The terms of the remuneration of either the sole member or

each of the three members, shall be mutually agreed upon
by the Parties when agreeing the terms of appointment.
Each Party shall be responsible for paying one-half of this
remuneration.

20.2.7

If at any time the Parties so agree, they may appoint a

suitably qualified person or persons to replace any one or
more members of the DAB. Unless the Parties agree
otherwise, the appointment will come into effect if a
member declines to act or is unable to act as a result of
death, disability, resignation or termination of appointment.
The replacement shall be appointed in the same manner as
the replaced person was required to have been nominated or
agreed upon, as described in this Sub-Clause.

20.2.8

The appointment of any member may be terminated by

mutual agreement of both Parties, but not by the Employer
or the Contractor acting alone. Unless otherwise agreed by
both Parties, the appointment of the DAB (including each
member) shall expire when the DAB has given its decision
on the dispute referred to it under sub-clause 20.4,
[Obtaining Dispute Adjudication Board Decision], unless
other disputes have been referred to the DAB by that time
under sub-clause 20.4, in which event the relevant date shall
be when the DAB has also given decisions on those
disputes.

20.3

Failure to Agree Dispute Adjudication Board

20.3.1

If any of the following conditions apply, namely:

(a)

the Parties fail to agree upon the appointment of the

sole member of the DAB by the date stated in the
first paragraph of Sub-Clause 20.2,

...
20.3.2

then the appointing entity or official named in the Particular

Conditions shall, upon the request of either or both of the
Parties and after due consultation with both Parties, appoint
this member of the DAB. This appointment shall be final
and conclusive. Each Party shall be responsible for paying
one-half of the remuneration of the appointing entity or
official.

20.4

Obtaining Dispute Adjudication Boards Decision

20.4.1

If a dispute (of any kind whatsoever) arises between the

Parties in connection with, or arising out of, the Contract or
the execution of the Works, including any dispute as to any
certificate, determination, instruction, opinion or valuation
of the Employer, then after a DAB has been appointed
pursuant to Sub-Clauses 20.2 [Appointment of the Dispute
Adjudication Board] and 20.3 [Failure to Agree Dispute
Adjudication Board], either Party may refer the dispute in
writing to the DAB for its decision, with a copy to the other
Party. Such reference shall state that it is given under this
Sub-Clause.

20.4.2

...

20.4.3

Both Parties shall promptly make available to the DAB all

information, access to the Site, and appropriate facilities, as
the DAB may require for the purposes of making a decision
on such dispute. The DAB shall be deemed to be not acting
as arbitrator(s).

20.4.4

Within 84 days after receiving such reference, or the

advance payment referred to in Clause 6 of the Appendix General Conditions of Dispute Adjudication Agreement,
whichever date is later, or within such other period as may
be proposed by the DAB and approved by both Parties, the
DAB shall give its decision, which shall be reasoned and
shall state that it is given under this Sub-Clause. However,
if neither of the parties has paid in full the invoices
submitted by each member pursuant to clause 6 of the
Appendix, the DAB shall not be obliged to give its decision
until such invoices have been paid in full. The decision
shall be binding on both Parties, who shall promptly give
effect to it unless and until it shall be revised in an amicable
settlement or legal proceedings as described below or by
other agreement between the Parties. Unless the Contract
has already been abandoned, repudiated or terminated, the
Contractor shall continue to proceed with the Works in
accordance with the Contract.

20.4.5

If either Party is dissatisfied with the DABs decision, then

either Party may, within 28 days after receiving the
decision, give notice to the other Party of its dissatisfaction.
If the DAB fails to give its decision within the period of 84
days (or is otherwise approved) after receiving such
reference or such payment, then either Party may, within 21
days after this period has expired, give notice to the other
Party of its dissatisfaction.

20.4.6

In either event, this notice of dissatisfaction shall state that

it is given under this Sub-Clause, and shall set out the
matter in dispute and the reason(s) for dissatisfaction.

20.4.7

If the DAB has given its decision as to a matter in dispute to

both Parties, and no notice of dissatisfaction has been given
by either Party within 28 days after it received the DABs
decision, then the decision shall become final and binding
upon both Parties.

20.5

Amicable Settlement

20.5.1

Both Parties shall endeavour to resolve any failures to agree

matters or any disputes by direct negotiations between
senior representatives of both parties.

20.5.2

When notice of dissatisfaction has been given under SubClause 20.4 above, both Parties shall attempt to settle the
dispute amicably before the commencement of court
proceedings. However, unless both Parties agree otherwise,
court proceedings may be commenced on or after the fiftysixth day after the day on which notice of dissatisfaction
was given, even if no attempt at amicable settlement has
been made.

20.6

Final settlement

20.6.1

Unless settled amicably, any dispute in respect of which the

DABs decision (if any) has not become final and binding
shall be finally settled by the courts of England and Wales.

...
20.7

Failure to Comply with Dispute Adjudication Boards

Decision

20.7.1

In the event that:

(a)

neither Party has given notice of dissatisfaction

within the period stated in Sub-Clause 20.4
[Obtaining Dispute Adjudication Boards Decision],

(b)

the DABs related decision (if any) has become final

and binding, and

(c)

a Party fails to comply with this decision,

20.7.2

then the other Party may, without prejudice to any other

rights it may have, refer the failure itself to the courts of
England and Wales under Sub-Clause 20.6 [Final
Settlement], Sub-Clause 20.4 [Obtaining Dispute
Adjudication Boards Decision] and Sub-Clause 20.5
[Amicable Settlement] shall not apply to this reference.

20.8

Expiry of Dispute Adjudication Boards Appointment

20.8.1

If a dispute arises between the Parties in connection with, or

arising out of, the Contract or the execution of the Works
and there is no DAB in place, whether by reason of the
expiry of the DABs appointment or otherwise:
(a)

Sub-Clause 20.4 [Obtaining Dispute Adjudication

Boards Decision] and Sub-Clause 20.5 [Amicable
Settlement] shall not apply, and

(b)

the dispute may be referred directly to the courts of

England and Wales under Sub-Clause 20.6 [Final
Settlement].

15. In addition, the following clauses were referred to in the parties submissions:
1.2.6

general words shall not be given a restrictive interpretation

by reason of their being preceded or followed by words
indicating a particular class of acts, matters or things and
references to including shall be deemed to mean
including, without limitation, unless the context expressly
requires; and

1.4.1

This Contract and any dispute or claims arising out of or in

connection with it or its subject matter or formation
(including non-contractual disputes or claims) shall be
governed by and construed in accordance with the law of
England and only the English Courts have jurisdiction to
hear and determine any disputes or claims arising under or
in connection with this Contract (including non-contractual
disputes or claims) save for the purposes of enforcement of
proceedings where any order, award or judgment of such
Courts may be enforced against the Parties in any other
jurisdiction.

The contract also provided that marginal words and other headings were not to be
taken into consideration in the interpretation of the Conditions.
The submissions of the parties
16. Miss Day relied strongly on the opening words of sub-clause 20.2.1, submitting that
the sub-clause contained a mandatory requirement to refer disputes arising under the
contract in the first place to adjudication in accordance with sub-clause 20.4.
Accordingly, she submitted that the Councils issue of proceedings following EMSs
notice of intention to refer a dispute to adjudication without either invoking or
cooperating in the adjudication procedure was a breach of contract.

17. Miss Day submitted also that if the Councils interpretation of sub-clause 20.8.1 were
correct, sub-clauses 20.2 to 20.7 would be rendered redundant. She said that such an
interpretation cannot have been the intention of the parties.
18. Miss Day relied also on a comment in the FIDIC Contracts Guide, which said:
... the first paragraph of Sub-Clause 20.2 requires a DAB to be
appointed within 28 days after a Party gives notice of intention to
refer a dispute to a DAB, and Sub- Clause 20.3 should resolve any
failure to agree the membership of the DAB. The parties should thus
comply with Sub-Clauses 20.2 and 20.3 before invoking Sub- Clause
20.8. If one party prevents a DAB becoming in place, it would be a
breach of contract ...

19. Miss Day submitted also that clause 20.8 was to deal with circumstances in which a
DABs appointment has expired or, for some other reason, the parties have agreed to
terminate the DABs appointment, or there has been a breach of contract by one party
so as to entitle the other party to refer the matter straight to court.
20. Ms. Sinclair submitted that sub-clause 20.8 was in effect an opt-out that enabled a
party who did not wish to have the dispute resolved by adjudication to refer the
dispute directly to the court. She relied strongly on the concluding words of the first
sentence (or otherwise) and submitted that this covered any situation where a DAB
was not in place either after a dispute had arisen or at the time when the party
wishing not to adjudicate had commenced litigation.
21. Ms. Sinclair pointed out that since the parties could not be under a mandatory
obligation to achieve the appointment of an adjudicator - perhaps because in good
faith they could not agree on the identity of a suitable adjudicator - the word shall,
where it appeared in clause 20.2.1, must necessarily be directive or aspirational, rather
than mandatory.
22. She submitted also that for a DAB to be in place there must be a DAB that is
empowered to resolve a dispute. She pointed out, correctly in my view, that the
source of the DABs authority was the Dispute Adjudication Agreement. She then
submitted that since the wording of this agreement stated expressly that it was not to
be effective until both its terms had been agreed by the contracting parties and the
adjudicator and the agreement had been signed by each of them, it could not be in
place until this had been done. In my view it is clear that, in the absence of any
agreement to the contrary, the Dispute Adjudication Agreement is to be in the form set
out in the Appendix to the Conditions (because that document is incorporated by
reference into the Dispute Adjudication Agreement).
23. Ms. Sinclair submitted that, both as a matter of language and the express provision in
clause 1.2.6, the phrase or otherwise was wide enough to include a state of affairs
where the Dispute Adjudication Agreement had not been concluded.
24. In relation to the provisions of sub-clause 20.4 to sub-clause 20.7 as a whole, Ms.
Sinclair submitted also that they were unenforceable for lack of certainty. She
identified what has been described as the gap in those sub-clauses, which arises
when the DAB has made a decision and one party has given a notice of dissatisfaction
- with the result that the DABs decision, whilst binding, is not final. The problem

then is that if the unsuccessful party refuses to comply with the decision of the DAB,
as it is required to do by sub-clause 20.4.4, the only remedy (it is said) available to the
other party is to refer the dispute occasioned by the refusal to comply to yet another
adjudication. This can have the effect, Ms. Sinclair submitted, that the party in
default can embark on a course of persistent non-compliance with DAB decisions and
thereby deprive the other of any effective remedy.
25. Ms. Sinclair points out that this problem has been recognised by FIDIC and I was
referred to erudite articles by Prof Niall Bunni and Taner Dedezade, a barrister
employed by Corbett and Co, which set out the difficulties that it presented.
26. In my judgment, there is a short answer to this. Whilst the point may be arguable in
the context of the standard FIDIC Books which include an arbitration clause, it loses
its force where the arbitration clause has been removed - as in the present case. The
articles to which Ms. Sinclair referred were concerned with the limitations on the
powers of arbitrators in this situation (in particular, whether or not they could order
specific performance), the type of award (interim, partial or final) that is or may be
appropriate if the DABs decision is to be enforced and the whole question of the
delay that would be involved in resorting to arbitration.
27. However, these problems disappear when the contract provides that the forum for
final resolution of any dispute is litigation, and not arbitration. I can see no reason
why the court could not intervene at the instance of one of the parties by ordering
specific performance of the obligation to comply with a decision of the DAB.
Alternatively, if it were to be argued that the proper or only remedy for this was by
way of a further adjudication, the court could enable the aggrieved party to secure
justice by refusing a stay of any court proceedings that it commenced. I therefore
reject Ms. Sinclairs submission that the relevant provisions in this contract are
unenforceable.
28. As to Ms. Sinclairs argument that there can be no DAB in place if a Dispute
Adjudication Agreement has not been concluded so as to be effective, whether
because the parties have been unable to agree the adjudicators fees or that it has not
been signed by the parties and the adjudicator, I think that Ms. Sinclair was disposed
to accept that, in the absence of any agreement between the parties, the effect of
incorporating the Appendix to the Conditions as the terms of the Dispute Adjudication
Agreement was that all the relevant terms of that agreement would be in place save
for agreement of the adjudicators fees. In my view, there would be an implied term
of that agreement - reflecting the common intention of the parties to it - that the
adjudicator would be entitled to his or her reasonable fees and expenses.
29. Both counsel referred me to a judgment of Hildyard J in Tang v Grant Thornton
[2013] 1 All ER (Comm) 1226, in which he had to consider the enforceability of a
dispute resolution clause. At paragraphs 56-58 he said this:
[56]

This recitation of authority illustrates the tensions, in the

context of provisions for conciliation or mediation of
disputes prior to arbitration or court proceedings, between
the desire to give effect to what the parties agreed and the
difficulty in giving what they have agreed objective and
legally controllable substance.

[57]

Agreements to agree and agreements to negotiate in good

faith, without more, must be taken to be unenforceable:
good faith is too open-ended a concept or criterion to
provide a sufficient definition of what such an agreement
must as a minimum involve and when it can objectively be
determined to be properly concluded. That appears to be so
even if the provision for agreement is one of many
provisions in an otherwise binding legal contract, with an
exception where the provision in question can be construed
as a commitment to agree a fair and reasonable price.

[58]

However, especially when the relevant provision is but one

part of a concluded an otherwise legally enforceable
contract, the court will strain to find a construction which
gives it effect. For that purpose it may imply criteria or
supply machinery sufficient to enable the court to determine
both what process is to be followed and when and how,
without the necessity for further agreement, the process is to
be treated as successful, exhausted or properly terminated.
The court will especially readily imply criteria or machinery
in the context of a stipulation for agreement of a fair and
reasonable price.

30. I agree with these observations. In this case I consider that the only missing
ingredient, the rate of the adjudicators daily fee, is one that can readily be assessed by
the court in default of agreement. Courts such as this one are well equipped to assess
what is a reasonable level of fee for an adjudicator in this type of situation. In this
case the adjudicator put his proposals to the parties in respect of his fees and neither
party challenged them. I doubt if the court would have much difficulty in concluding
that the figures that he proposed were reasonable (although I am not expressly
deciding this).
31. As I have already mentioned, Ms. Sinclair also relied on the requirement for the
Dispute Adjudication Agreement to be signed by all the parties before it became
effective. I see nothing in this. If a party without good reason refused to sign the
agreement, I cannot see why it could not be compelled to do so by an order for
specific performance at the suit of one or more of the other parties. I therefore reject
Ms. Sinclairs submissions that the contract is unenforceable.
32. Reverting to sub-clause 20.8, my conclusions are clear. First, the words if a dispute
arises ... and there is no DAB in place apply to a situation where there is no DAB in
place at the time when the dispute arises. If it were otherwise, as Miss Day pointed
out, the provisions of sub-clauses 20.2 and 20.3 could never have any application
because, by definition, under those sub-clauses there has to be a dispute in existence
before the process of appointing a DAB can begin. Thus in every case where subclause 20.2 or 20.3 applies there will be in existence a dispute but no DAB. Thus,
since under sub-clause 20.8 sub-clause 20.4 is disapplied, on Ms. Sinclairs approach
to the construction of sub-clause 20.8 there can never be a reference of a dispute to
adjudication in any contract which provides that the DAB is to be appointed in
accordance with the provisions of sub-clause 20.2 or sub-clause 20.3.

33. It seems to me that sub-clause 20.8, which is in the same form in all three of the
FIDIC Books, probably applies only in cases where the contract provides for a
standing DAB, rather than the procedure of appointing an ad hoc DAB after a dispute
has arisen. Ironically, Ms. Sinclair said that the position was precisely the opposite:
in her skeleton argument she submitted that the parties could prevent clause 20.8 from
operating at all by appointing a standing DAB. I have to confess that I did not
understand this point, but it shows that Ms. Sinclair was not suggesting that the fact
that, depending upon the dispute resolution procedure chosen, sub-clause 20.8 might
not have any application was fatal to what I would otherwise consider to be the
correct construction of the conditions.
34. In addition, I do not accept Ms. Sinclairs submissions about what is meant by the
phrase no DAB in place. The right to refer a dispute to adjudication arises under
sub-clause 20.4.1 as soon as a DAB has been appointed, whether under sub-clause
20.2 or 20.3. It is quite clear from the words final and conclusive in sub-clause 20.3
that the process of appointment is complete once the nominating body has
appointed the adjudicator. That must mean the identification of a particular person
as the adjudicator because the appointing body cannot make the Dispute Adjudication
Agreement for the parties. In my judgment, therefore, a DAB is in place once its
member or members have been duly appointed in this way because from that moment
onwards a dispute can be referred to it. Not even Humpty Dumpty would suggest that
a dispute could be referred to a DAB that was not in place.
35. For all these reasons, therefore, I reject the Councils submissions that sub-clause 20.8
gives it a unilateral right to opt out of the adjudication process, save in a case where at
the outset the parties have agreed to appoint a standing DAB and that, by the time
when the dispute arose, that DAB had ceased to be in place, for whatever reason.
Further, I also reject the Councils submissions that the adjudication provisions in the
contract are unenforceable.
36. Accordingly, I accept EMSs case that the contract requires that the determination of
the current dispute is to be by way of adjudication and amicable settlement under subclauses 20.4 and 20.5 and, only failing that, by litigation.
Should there be a stay?
37. Both parties accept that the court has an inherent jurisdiction, which involves an
exercise of judicial discretion, to order a stay of the claim brought by the Council.
The question is whether this is an appropriate case in which the court should exercise
that discretion in favour of EMS.
38. Ms. Sinclair submitted that any decision by the DAB would almost inevitably
provoke a notice of dissatisfaction from one or other party. Accordingly, to embark
on the fairly lengthy (and therefore expensive) adjudication procedure under the
contract would be a wholly or at least largely unproductive exercise. She submitted
that the dispute raises complex questions of construction and application of
legislation, mandatory codes and standard industry practice and will require extensive
disclosure. She submitted also that the rough and ready process of adjudication is
entirely inapt to resolve this dispute.

39. As to this last point, Ms. Sinclair may well be correct, but that is nothing new: the
complexity of a potential dispute about when the required power output was achieved
was foreseeable from the outset, yet nevertheless the parties chose to incorporate the
adjudication machinery in the FIDIC form of contract. If Ms. Sinclair is right to
describe this type of adjudication as a rough and ready procedure, then both parties
agreed to have it.
40. Nevertheless, I have some sympathy with Ms. Sinclairs submissions. This is not a
case where either party has invested any time or money on the preparation for or
conduct of an adjudication, and so it can be fairly said that it is better to have one, if
more expensive and extensive, dispute resolution procedure than to take the real risk
that this will be required in any event in addition to an adjudication. If no other
factors were in play, I would be tempted to accede to Ms. Sinclairs submissions
because the rival scenarios are quite finely balanced and, if anything, are perhaps
tipped in the Councils favour.
41. However, there is another factor in play. As the authorities clearly show, there is a
presumption in favour of leaving the parties to resolve their dispute in the manner
provided for by their contract: see DGT Steel and Cladding v Cubitt Building [2007]
BLR 371, and the cases referred to at paragraphs 5 to 11 of the judgment.
42. Whilst Miss Day acknowledged that the dispute was clearly difficult because the
parties had not managed to settle it at the mediation, she submitted that it cannot be
assumed that the parties would adopt the same positions in the light of a reasoned
decision from an adjudicator. Alternatively, she submitted that, even if the
adjudicators decision were not accepted by one or other party, it might nevertheless
provide a starting point from which the parties could settle the dispute. She submitted
that it cannot and should not be assumed that an adjudication would serve no purpose.
43. Although, as I have already indicated, on purely practical grounds the pragmatist in
me would tend to favour the contentions of Ms. Sinclair (if all other things were
equal), I consider that the various factors are too finally balanced for me to conclude
that, overall, the Council has made out a sufficiently compelling case to displace the
presumption in favour of adopting the method of dispute resolution chosen by the
parties in their contract.
44. For these reasons, I conclude that the Council has not made out a sufficient case for
resisting a stay. Accordingly, the action must be stayed and the parties left to resolve
their dispute in accordance with the contractual machinery in the light of the matters
discussed in this judgment.