Right to adjudicate receives Mmaxximum protection
You may recall our e-update earlier this year on the case of T Clarke (Scotland) Limited v. Mmaxx Underfloor Heating Limited. T Clarke subcontracted Mmaxx in the redevelopment of a school. The relationship between the parties became fraught and nine adjudications were commenced under the contract, eight by Mmaxx. T Clarke unsuccessfully applied to the Court of Session for an interim interdict to be granted to prevent the commencement of any further adjudications by Mmaxx.
T Clarke’s appeal to the Inner house has now been decided.
The original decision & T Clarke’s argument at appeal
In the original decision, the Lord Ordinary stated that the court would only deprive a party of an express right conferred by Parliament, such as the right to adjudicate in construction contracts, in the most exceptional circumstances. At the appeal, T Clarke argued that the court was entitled to intervene if there was an abuse of process and that proceedings should be restrained if brought for improper, ulterior purposes or based on a false factual basis. They claimed these factors were at play.
Mmaxx argued that the court was not entitled to prevent all future adjudications as this amounted to asking the court to innovate on the parties’ contract. In addition to a contractual right, the right to adjudicate “at any time” was established by statute. Further, the order being sought was too broad as it would prevent any future adjudication whatsoever, no matter how strong the case. If the court was to intervene at all, it could only be on an adjudication by adjudication basis, not a general prohibition.
The court hailed adjudication as an important process for those within construction, which is provided by Parliament, and with which the court would be reluctant to interfere. It was stated that although the court can intervene in cases where there has been an abuse of process, this power should be utilised very sparingly since it could result in denying a party the right to pursue a well-founded claim. The court agreed with the Lord Ordinary’s main concern that if the interdict was granted this would prevent Mmaxx from commencing any adjudication in the future, even if it was well-founded. The appeal court agreed that there was no clear inference from the circumstances of the case that Mmaxx had acted unreasonably and that its actions were consistent with a “robust approach” to pursuit of its claims.
This decision provided further confirmation of the importance of the right to adjudicate and the reluctance of the courts to restrict this. The court recognised the commercial realities of a robust approach being taken in construction disputes and will be slow to deny parties this right. As with the decision at first instance, that is to be welcomed.