ISG Construction Limited V English Architectural Glazing Limited
Monday, 16 December, 2019
 EWHC 3482 (TCC)
HHJ Stephen Davies
Adjudicators’ decisions – Contract terms – Delay – Extension of time – Interim payments – Interpretation
The claimant, ISG Construction Limited (ISG) entered into a sub-contract with English Architectural Glazing Limited (EAG) whereby the defendant would design, supply and install cladding on a project in London. The start date under the subcontract was 20 March 2017, and the contractual completion date was to be 11 September 2017.
It is undisputed that the claimant did not permit the defendant to start on site until 11 September 2017 and as a result the claimant awarded the defendant a 25 week EOT, but EAG sought a further extension taking into account the effect of working over the winter period. The works were delayed by around 20 weeks over and above the 25 week EOT granted.
ISG held EAG responsible for that delay and had failed to comply with the notice provisions that would entitle it to an additional EOT. ISG deducted £3.2m from EAG’s interim valuation 35 as its bona fide estimate of loss arising out of delay, which in accordance with the words of the subcontract was to be “binding and conclusive … until final determination or agreement.”
EAG commenced an adjudication seeking inter alia declarations that it was entitled to a further EOT, and that ISG had not proved the losses it sought to deduct from EAG’s interim application. The Adjudicator found that EAG was not responsible for ISG’s losses, and ordered ISG to repay the deducted sum.
ISG then commenced Part 8 proceedings, seeking to challenge the Adjudicator’s decision on the basis that he had made errors which could be resolved on a final basis by the Court. ISG asked the Court to declare that EAG had not given adequate notice of delay, and also that ISG’s “bona fide estimate” was binding on the parties until determination at final account stage. ISG intimated a future adjudication to which these declarations would be relevant.
The Court accepted that it had jurisdiction to grant relief in Part 8 proceedings in relation to adjudications “where it is appropriate to do so”, but declined to make the declarations sought.
In response to the EOT issue, the Judge found these were issues mixed with fact and law and therefore “inherently unsuitable for determination in isolation under Part 8”. The Judge subsequently declined the grant declaratory relief. Declarations (4) and (5) related to the bona fide estimate issue. The Judge here also concluded that ISG was not entitled to these declarations, noting “they are premised on the basis of an all or nothing position” and that the adjudicator had been “plainly entitled” to determine whether the estimate was bona fide”.
Ultimately none of the declarations were considered appropriate. The Judge warned that engaging in a “diet of serial adjudications”, supplemented by a series of Part 8 applications to the TCC is not always in the parties’ best interests.
This case serves as a reminder that full length part 7 proceedings are not the only way of challenging an Adjudicator’s decision. If a question is inherently suitable for resolution by way of Part 8 proceedings, the Court has jurisdiction to deal with the question in this way and in limited circumstances this may be a cost effective and speedy way of obtaining final determination of an important issue. Running through the judgment though is a certain amount of scepticism as to ISG’s approach, and the final paragraph is illuminating.