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Wed August 17 2022

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Precedence of dispute resolution clauses in JCT 2005 MW

25 Jun 10 Carter was appointed by the Prices under a JCT 2005 MW form of contract for the demolition of their bungalow and construction of a new house for £226,000.

Completion was due on 26 May 2008, but the work was delayed, and the Prices took possession of the site on 24 July 2008. Carter was granted an extension of time of 9 weeks only. Practical completion was achieved on 18 February 2009. The contract provided for disputes to be referred to adjudication and arbitration. The Prices wanted to use adjudication as a cheaper method of resolving the dispute. The nominated adjudicator was also the contract administrator for the works and Carter had misgivings about the same person fulfilling both roles. Carter served a notice of arbitration on the Prices. As the parties failed to agree on a nomination, the RIBA nominated Mr. James Middleton-Stewart.

Mr. Middleton-Stewart issued his award on 8 March 2010, and the Prices issued the present claim outside the 28-day time limit stated in section 70 of the Arbitration Act 1996. The Prices argued that the claim was not out of time because there was an outstanding process of review of the award, and they had not been notified of the result until 29 March 2010 (at the earliest). The Prices sought leave to appeal and an extension of time.

The Prices argued that by section 67 of the Act, the arbitrator had no jurisdiction because the primary mode of dispute resolution under the contract was adjudication, not arbitration. They maintained that clauses 6 and 7 of the contract, taken together, meant that adjudication took precedence over arbitration as a method of dispute resolution. Alternatively, the Prices maintained that the Notice of Arbitration had been defective. A challenge under section 69 was abandoned.

The Prices alleged that there had been serious irregularities within the meaning of section 68 of the Act which had caused them injustice. The irregularities complained of were that the arbitrator had delegated some of his duties to an assessor and then refused to allow the parties the opportunity to challenge the assessor’s evidence. In addition, the arbitrator had refused to consider some of the Prices’ claims which they had introduced towards the end of the arbitration, and whether they had any entitlement to liquidated damages.

Paul and Elizabeth Price v Ian Carter (t/a Ian Carter Building Contractors), [2010] EWHC 1451 (TCC)

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