Scottish Court of Session Decisions

"I enclose my Decision Letter, a hard copy of which has been signed before midday today. A copy of the signed letter will follow in the post. Please confirm that you have received this email.

You will see that I envisage some minor further written procedure to take account of a matter touching on overall quantum. Please also confirm that you agree to further extend the Adjudication procedure until 5pm on Friday 11 April for that stated purpose alone."

"72. I therefore require parties to furnish me by Friday 11 April with a statement indicating their respective approaches to an appropriate sum to be deducted from the figure of £4,856,172. If there is agreement, so much the better, but if there is not, I am happy to work further on any submissions received so as to adjudicate upon the level of any such deduction which may be appropriate, even £Nil. I say nothing more at present about the appropriate level of such a deduction. The Adjudication will therefore, with parties' agreement, have to have its life extended until 5pm on Friday 11 April. Please confirm.

73. Accordingly, I find in favour of the partnership ad interim in the sum of £3,518,979.02 with simple interest thereon at the rate of 8% annually from the date of the Notice of Adjudication until payment."

There then followed an exchange of emails. At 16.57 on 7 April 2008 the defenders' solicitor wrote to the adjudicator indicating that as he had failed to issue a proper decision by noon that day, the mandatory period for a proper decision had expired and he was functus officio and unable to make any further directions or take any further action in relation to the adjudication. Even if it were possible for them to do so, he indicated that the defenders would not be prepared to agree to any further extension of time as requested in the adjudicator's email. The adjudicator replied by email dated and timed 22.40 on 7 April 2008 indicating inter alia that "your response is extremely disappointing, since my Award is clearly an interim award...". The defenders' solicitor replied by email at 08.36 on 9 April 2008 stating inter alia that:

"Our clients do not consider that your purported Decision Letter constitutes a proper decision. A proper decision was not reached or issued by 12 noon yesterday. The purported Decision Letter purports to make an interim decision. An adjudicator has no power to make an interim decision. The purported Decision Letter does not purport to make a decision in terms of the Contract. In any event even if there had been power to make an interim decision, it not having been followed up by a final decision, the interim decision cannot be enforced."

"In light of the absence of any detailed or substantive response by Friday 11 April at 12 noon, as required by me, I am writing now simply to confirm my decision".

Senior counsel submitted that this clearly indicated that the adjudicator regarded the procedure as ongoing until that moment. Senior counsel also pointed out that in paragraph 74 of the purported decision letter the adjudicator delayed any finding as to the expenses of the adjudication, including the adjudicator's expenses, until Friday 11 April. In terms of Clause 39A.7.1 of the contract, if the adjudicator wished to state how his fee and reasonable expenses was to be apportioned as between the parties he required to do this in his decision. The fact that he did not do so in the "Decision Letter" is inconsistent with this being his decision.

"Whereas arbitration is a form of conclusive resolution of disputes, an adjudication is a form of provisional resolution only. Adjudication does not oust the jurisdiction of the courts or of an arbiter. Its primary purpose is to regulate a dispute ad interim, pending a definitive resolution of it by litigation, arbitration or agreement. The provisional nature of an adjudication is linked with the short time limits within which the process has to be concluded. On that view, I consider that a Scottish adjudicator is not subject to the common law limitation on the powers of an arbiter."

I was also referred to paragraph [40] in which the Lord Justice Clerk observed:

"the availability of judicial review as a remedy for an adjudicator's intra vires error of law would subvert the purpose of adjudication. If the courts were to interfere with a decision of an adjudicator on that ground, they would be adding a significant common law qualification to what is a statutory construct, they would be providing an opportunity for the kind of delay that the system is designed to prevent, and they would be providing a remedy which Parliament could have expressly provided but, it seems, chose not to."

"If a speedy outcome is an objective, it is best achieved by adherence to strict time limits. Likewise, if certainty is an objective, it is not achieved by leaving the parties in doubt as to where they stand after the expiry of the 28 day period. These considerations reinforce the view that para. 19 means exactly what it says, so that it is not open to an adjudicator to purport to reach his decision after the expiry of the time limit."

(i) The adjudicator is given wide powers in terms of Clause 39A.6.5 and these are not exhaustive. There is no obvious reason why he should not issue his reasons in portions. In terms of Clause 39A.6.5.12 he is empowered to issue other directions relating to the conduct of the adjudication.

(ii) Although senior counsel accepted that the whole dispute must be covered by a single final decision, there was no reason why "en route" to this decision the adjudicator should not make an interim or partial finding or award. In terms of Clause 39A.6.5 he was empowered to set his own procedure.

(iii) An interim decision is a form of interim regulation and is entirely consistent with the statutory system of interim regulation.

(iv) An adjudicator has wider powers than an arbiter, and is not subject to the common law limitations on the powers of an arbiter - see Diamond at para. [20]. I was also referred to paragraph 67 of the re-issue of the Stair Memorial Encyclopaedia dealing with arbitration, the author of which is Lord Hope of Craighead. Some doubt is there expressed as to whether an arbiter's power to pronounce interim awards can be implied; counsel observed that an interim award may be possible in arbitration, but there is nothing in the body of law on arbitration which might suggest that an adjudicator does not have an implied power to make an interim award should he consider it appropriate to do so.

(a) On the ordinary canons of construction, the adjudicator's emails cannot be taken into account. That timed at 22.40 on 7 April 2008 was manifestly informal, written late at night and not a considered response to a legal query regarding the final document. In any event, the adjudicator was on any view functus by this time.

(d) Even if this decision is construed as being interim when issued, given its nature it became final on the expiry of the time limit of the adjudication. It is stated to be a decision, it is expressed in the language of findings, and it dealt with all issues on liability and quantum referred to the adjudicator. Senior counsel referred me to Bell on Arbitration (2^nd Edition) at paragraph 507 and submitted that because the adjudicator has awarded the minimum figure that he would award in any event, even if this award was interim when it was issued, it became final four minutes later on the expiry of the time limit.

"Adjudicators' decisions are intended to be provisional and in the nature of best shots on limited material. They are not to be used as a launching pad for satellite litigation designed to obtain what is to be obtained by other proceedings, namely the litigation or arbitration that must ensue if the parties cannot resolve their differences with the benefit of the adjudicator's opinion."

Some of these observations were made in the context of adjudications under the 1996 Act and the Statutory Scheme; however, while of course there may be differences between the powers of an adjudicator who proceeds entirely under the provisions of the Act and the Scheme, and those of an adjudicator who proceeds under contractual provisions, I see no justification for a radically different approach by the courts to review of an adjudicator's decision. In both cases the adjudicator's decision is not open to challenge on intra vires errors of law. In both cases the adjudicator's decision will be a form of provisional resolution only, which may be subject to final determination by arbitration or litigation. In both cases short time limits will apply, and the adjudicator may have to do his best on the material available. In both cases the adjudication process may be described fairly as a form of "rough justice". By rehearsing these similarities, I am not to be taken to be suggesting that the courts will not interfere with an adjudicator's decision - clearly they will do so in appropriate circumstances, for example, where there has been a breach of natural justice, or where the adjudicator has patently failed to exercise his jurisdiction or has patently exceeded that jurisdiction. Nonetheless, it must be borne in mind in a case such as this that the parties have contracted for a form of provisional dispute resolution in which speed of determination at the provisional stage has a high priority, which may result in roughness of justice at that stage.

"Para. 39A.6.3 requires the adjudicator to reach his decision within 28 days of the referral and forthwith send that decision in writing to the parties. In terms of current commercial understanding and procedure, and modern methods of communication, there would appear to be little doubt that the terms 'forthwith' should mean that the decision is to be sent immediately or as quickly as possible by what is currently regarded as conventional and universally available methods of business communication. In particular therefore there would appear to be no reason why any such decision cannot be immediately transmitted to interested parties by fax transmission. It may conceivably be arguable that a decision could be communicated or intimated to other parties by first class postal delivery, although such a claim might be regarded as archaic."

"Nowadays virtually all adjudicators have available instantaneous methods of transmission. Lord Wheatley was right to say that the use of first class post is archaic. If an adjudicator cannot send the decision by email or fax, one or other of the parties will usually be keen to send someone to collect it."

The fact that the electronically delivered decision did not bear the adjudicator's signature is neither here nor there, for the reasons set out by Akenhead J in Treasure & Son v Dawes.

The argument under Answer 7.7(v) of the Defences - adequacy and intelligibility of the adjudicator's reasoning

"where a provision expressly requires a decision to be communicated together with the reasons for it, then if adequate reasons are not included in the record of the decision and notified as required, then the decision itself will normally be held to be invalid."

[48] Senior counsel for the defenders observed that the adjudicator's reasons were much briefer than one might expect given the size and complexity of the issues before him. Parties' written arguments and contentions, together with supporting materials, were lengthy. There was a referral, a response, a rebuttal to the response, submissions regarding experts' reports, and a response to the rebuttal. There was a hearing on quantum, and then pursuers' and defenders' submissions on quantum. There were then pursuers' and defenders' closing submissions. A large number of issues were raised, and it was not apparent that the adjudicator addressed all of these. Against these general observations, senior counsel for the defenders advanced his specific criticisms as follows:

(a) The adjudicator did not give adequate reasons or explain his views for his decision on the issue of the appropriate remedy for the pursuers. This was raised in paragraph 3.11 of the defenders' final submission to the adjudicator (No. 31 of the agreed bundle). The defenders' submission to the adjudicator on this point was that the pursuers' remedy was one of damages for delay to completion, not damages for breach of contract in failing to have delivered a building conform to contract at a stage prior to Practical Completion. This argument had been raised and developed more fully in paragraph 6.3.1 of the defenders' response (No. 14 of the agreed bundle) in which the argument was divided into seven separate sub-paragraphs and authorities in support were cited. The adjudicator deals with these submissions very briefly, together with other unrelated submissions, in paragraph 39 of the final document, and proceeds to state in the following paragraph that he agrees with the pursuers "on this matter". He does not make it clear to which of the matters raised in paragraph 39 he is referring, and he does not appear to have addressed the argument that the remedy sought is the wrong one.

(b) The adjudicator did not deal at all with the argument at paragraph 3.12 of the defenders' final submission, and in particular the last sentence of that paragraph which related to apportionment of liability as between the defenders and Odeon. The issue of whether certain terms could be implied into the contract, and whether they were breached, and if so, the consequences of such breach, was dealt with more fully in the defenders' response to the referral at paragraph 6.3.1(vii) and 6.3.3. All that the adjudicator dealt with was his finding that the defects were not caused solely by fault of Odeon - he did not explain his views on these matters at all. Senior counsel emphasised that the question was not whether the arguments made on behalf of the defenders were sound, but whether the adjudicator considered them. While he did at least mention the argument contained in paragraph 3.11 of the defenders' final submissions in his final document, the argument in 3.12 is not mentioned at all. It was submitted that the defenders were entitled to see a discussion and a conclusion on these matters; the adjudicator might be entitled to decide these points as he thought fit, but the parties were entitled to see that he had at least dealt with these issues which were clearly "flagged up" for his decision.

(c) At paragraph 61 of the final document the adjudicator found that the defenders were in breach of contract in that they made a material contribution to the events which occurred and to the losses and/or damage which flowed from those events. He did not explain what loss and damage the defenders were said to have contributed to. It could not be the whole of the pursuers' loss and damage, because it is clear from paragraphs 71 and 72 of the final document that the adjudicator considers that some deductions are appropriate. His reasoning on these deductions is not intelligible. The pursuers' submissions on quantum were to be found in the table at page 18 of Document 28 of the agreed bundle. These show the total sum claimed in the adjudication as being about £4.8 million; there was the possibility of a deduction from this figure of £2,633,903.24 if certain contested items were found in favour of the defenders. The defenders' submissions on quantum were to be found in No 29 of the agreed bundle; at page 12 of this document, under paragraph 5 "liquidate and ascertained damages" the defenders contend that they are entitled to be paid £490,000. In paragraphs 71 and 72 of the final document the adjudicator states that he is not able, at present, to square these two figures, and that there might be a deduction which might be Nil. If this was his final decision, there were no intelligible reasons to explain how he reached it. Even on his interim finding of £3,518.979.02 the adjudicator does not explain how he treats the deduction claimed by the defenders of £490,000. This is because he did nothing with it - he wanted to consider further how it fitted in. The reader of the final document is left to wonder how the adjudicator dealt with the possible deductions totalling £2,633,903.24; it is not clear whether he accepts that any deduction is appropriate, nor is there any reasoning as to why a deduction was or was not appropriate.

(g) In paragraph 71 of the final document, the adjudicator states that he accepts the pursuers' figures on quantum, but provides no reasons for this statement nor any intelligible explanation of why the defenders' submissions and supporting evidence were rejected. In this respect, the defenders' submission was not that the reader could not make sense of the adjudicator's reasoning on quantum, but rather that there was a complete absence of such reasoning. There was a wealth of factual material in the form of expert evidence for the pursuers (Nos. 18 and 27 of the agreed bundle) and for the defenders (No. 20 of the agreed bundle). On this point, the adjudicator's reasons were both inadequate and unintelligible.

(f) The adjudicator was required to apply the normal standards of proof applicable to civil disputes. No explanation was given as to which evidence he accepted, why he accepted it, or why he rejected large parts of the defenders' evidence. The requirement for the normal standards of proof applicable to civil disputes is not normally part of the obligations imposed on an adjudicator - it arose in this case from a bespoke amendment. Because of it, there must be proof, and the adjudicator must rely on evidence. Although he refers to the standard and burden of proof at paragraph 37 of the final document, nowhere is there any explanation as to his reasoning when applying this standard. Because of this bespoke amendment, the present case falls to be excluded from the generality of the South Bucks case.

"A challenge to the intelligibility of stated reasons can succeed only if the reasons are so incoherent that it is impossible for the reasonable reader to make sense of them. In such a case, the decision is not supported by any reasons at all, and on that account is invalid".

The informed reader knows the general background to the case. This test, based on reasons being "so incoherent" that it is impossible for the reasonable reader to make sense of them is a much higher test than simply intelligibility and adequacy. Further light is shed on this high test by the observations of Jackson J. in Carillion Construction Ltd (supra) (with which the Court of Appeal appears to have agreed, and which is quoted at paragraph 54 of Chadwick LJ's Opinion):

"If an adjudicator is requested to give reasons pursuant to para. 22 of the Scheme, in my view a brief statement of those reasons will suffice. The reasons should be sufficient to show that the adjudicator has dealt with the issues remitted to him and what his conclusions are on those issues. It will only be in extreme circumstances, such as those described by Clerk LJ (sic) in Diamond... that the court will decline to enforce an otherwise valid adjudicator's decision because of the inadequacy of the reasons given. The complainant would need to show that the reasons were absent or unintelligible and that as a result, he had suffered substantial prejudice."

(a) It was apparent that the adjudicator understood and considered the defenders' submissions with regard to appropriate remedy. He touched on this at paragraph 10 of the final document, the third sentence of which is at least in part a reflection of the defenders' submissions in paragraph 3.11 of their final submission. Paragraph 39 of the final document reflected precisely what the defenders argued in paragraph 3.11 of their final submission, and it is clear from paragraphs 40-42 that the adjudicator rejected this argument. He has therefore dealt with the issue before him, he agrees with the pursuers on it, and in paragraphs 40-42 he identifies various factors which support that view. He has therefore done what Jackson J. indicated in Carillion Construction that he should do - he has provided a brief statement which shows that he has dealt with the particular issue complained about and reached a conclusion on that issue.

(b) The defenders' argument before the adjudicator on this point was presented under three heads - first, there were terms which fell to be implied into the contract, and the actings of the pursuers in allowing Odeon to start works when they did were in breach of those terms; second, this breach resulted in joint contribution; and third, apportionment of losses required to follow apportionment of liability as between the defenders and Odeon. This formulation still left alive the issue of what the defenders did in fact do, and whether this caused any problems. The adjudicator touched on these arguments briefly at paragraph 10 of his final document. Although he did not deal with this further in paragraph 39, it was clear from the last sentence of paragraph 40 and paragraphs 41-43 that the adjudicator was dealing with the issue of the inter-relationship between the defenders and the problems with this building. In the dispute referred to him there were two parties, and as long as the actings of the defenders had a major contributory or causative effect to the problems with the building, that would be sufficient to fix liability. In the following paragraphs of the adjudicator's final document he looks to contribution by the defenders to the problems with the building, and whether that contribution is elided by any other factor. He reaches the view that it was not. He then observes (at paragraph 56) that the attribution of responsibility as between Odeon and the defenders is an exercise for another occasion. Although the adjudicator did not specifically refer to the defenders' argument about implied terms and the contents of paragraph 3.12 of their final submissions, it was clear that he had in mind the inter-relationship between the defenders and Odeon, and the issue as to whether the emergence of the Odeon works precluded a finding of liability for breach of contract by the defenders. The adjudicator answered this question clearly, and his decision meets the test stated in Diamond and Carillion.

(c) Any problem relating to the adjudicator's decision on quantum arose only from the way in which he expressed himself in paragraphs 70-73 of the final document. Properly read, the figure of £2,633,903.24 in paragraph 71 is not an acknowledged saving. Having regard to the adjudicator's views on liability, notwithstanding a possible contribution by Odeon to the problems with the building, the adjudicator felt able to make a complete finding against the defenders . What the adjudicator did was to accept the figure of £3,518,979.02 from the appendix at page 18 to the pursuers' submissions on quantum (No. 28 of the agreed bundle) and, although Odeon may have contributed to the problems, as they are not party to the adjudication he finds the defenders liable. This is all clear from paragraph 71 of the final document, where the adjudicator accepts the pursuers' figures. The sum which the pursuers claimed in the adjudication was approximately £4.8m, and in the appendix provision was made for six aspects of possible deductions if contested items were found in favour of the defenders. The figure which the adjudicator found in favour of the pursuers was that shown at the foot of the appendix, and included the whole possible deductions. The sum which he awarded was the minimum which he considered might possibly be found due to the pursuers, and the figure of £490,000 might or might not fall to be added that figure. Whilst one might perhaps take issue with some of the adjudicator's wording, or indeed even with his logic, any errors were internal errors. What is clear is that the adjudicator considered the detailed submissions for both parties on quantum, and reached a decision on this matter, having stated that he was satisfied that he had sufficient information to allow him to make a decision.

(g) The adjudicator was quite entitled to confine himself to a statement that he accepted the pursuers' figures. It was clear from paragraph 65 of the final document that the adjudicator had regard to information provided by the defenders as well as that provided by the pursuers. Although his reasons with regard to why he accepted that pursuers' figures are very briefly stated, he has referred to this matter and has indicated his decision on it. This is sufficient for the needs of an adjudication.

(f) On the bespoke amendment requiring the adjudicator to apply the normal standards of proof applicable to civil disputes, the adjudicator was still entitled to rely on his own knowledge and experience. There were only two standards of proof, namely civil and criminal. This provision did not require the adjudicator to hear evidence as a judge might hear evidence in a civil proof - as was observed in Carillion Construction, many adjudicators are not qualified lawyers. The procedure is more inquisitorial than procedures in arbitration or litigation, and the adjudicator is not required to hear any evidence at all - it would be open to him to decide the matters referred to him on the basis of the referral and response. The bespoke addition added nothing to the obligations incumbent on the adjudicator.

(a) The adjudicator summarised the defenders' position with regard to appropriate remedy at paragraph 10 of the final document, and part of paragraph 39 reflects what is contained in paragraph 3.11 of the defenders' final submission. It is clear from paragraph 40 and the following paragraphs that the adjudicator agrees with the pursuers on this point, and he proceeds to deal with the case as one of breach of contract by defective performance. There is sufficient by way of reasons and that there is no force in this criticism.

(b) Although the adjudicator does not make express reference to paragraph 3.12 of the defenders' final submission, it is clear that he has considered the relationship between works carried out by the defenders and works carried out by Odeon, and the question as to whether the latter precluded a finding of liability for breach of contract by the defenders. He observes at paragraph 56 that attribution of responsibility as between Odeon and the defenders is an exercise for another occasion. It is in my view tolerably clear that he has considered the issues raised in paragraph 3.12 of the defenders' submissions, and that he has reached the decision that as long as the defenders' works were a major contributory or causative factor in the problems with the building, this was sufficient to fix liability in the proceedings before him. He was not bound by the parties' characterisations of the issues - he was entitled to characterise the issues in a way which he considered appropriate, provided that he dealt with the matters that were referred to him. Having considered the question of the relationship between the Odeon works and the defenders' works, he has reached a decision on this matter. I am of the view that his decision meets the relevant test.

(c) The way in which the adjudicator has approached quantification is perhaps less clear, and his reasons verge on the telegraphic in this respect. However, they are more intelligible when read against the material contained in the parties' final submissions on quantum. First, it should be kept in mind that despite his purported requirement that parties furnish him with a statement indicating their respective approaches to an appropriate deduction from a figure of £4,856,172, the adjudicator was satisfied that he had sufficient information to allow him to make a decision on quantum. He had read and understood both submissions on quantum and held a short hearing to allow any further submissions to be advanced. He accepted the pursuers' figures, subject only to a query in relation to a deduction of £490,000. Looking to the figures and submissions before him, it seems reasonably clear that he regarded the sum of £3,518,979.02 brought out at the foot of the appendix to the pursuers' submissions on quantum to be the minimum to which the pursuers were entitled. Depending on how the sum of £490,000 by way of liquidate and ascertained damages claimed by the defenders in their final submission on quantum was treated, the sum to which the pursuers were entitled might remain at the figure stated in paragraph 73 of the final document, or it might be increased by anything up to £490,000. It is true that the figure of £2,633,903.24 which is referred to in paragraph 71 of the adjudicator's final document is described as an "acknowledged saving", which properly read, it is not - it is merely the total allowable if all six deductions are found in favour of the defenders. However, although as I have observed the adjudicator's reasons might be described as somewhat opaque in this regard, what is reasonably clear is that the sum of about £3.5m contained in paragraph 73 is the minimum figure to which he considers the pursuers are entitled. It might be that the pursuers could seek to argue that they were prejudiced by his brevity of reasoning and his approach in this regard, but they do not seek to do so in these proceedings. Prejudice in this respect (if prejudice there be) lies with the pursuers, not with the defenders. As was observed in Carillion Construction Ltd, "the complainant would need to show that the reasons were absent or unintelligible and that, as a result, he had suffered substantial prejudice." I do not consider that it can be argued that the defenders have suffered substantial prejudice in this respect, nor indeed was this argued before me. I do not consider that there is force in this specific criticism.

(g) The only explanation which the adjudicator gives for finding in favour of the pursuers in the sum stated in paragraph 73 of the final document is his statement at paragraph 71 that he accepts the pursuers' figures. However, this is in my view all that was required of him. It is clear that he has considered the evidence and the submissions on behalf of both parties, and in reaching the figure stated in paragraph 73 he has made full allowance for all of the six possible deductions in favour of the defenders which are shown in the appendix to the pursuers' final submissions on quantum, and he has similarly given the defenders the benefit of any doubt that he has regarding their claim of £490,000 for liquidate and ascertained damages. He is not required to give detailed reasons as to why he accepted the pursuers' figures, as one might expect from a judge or an arbiter; it is sufficient that he shows that he has dealt with the issues remitted to him and what his conclusions are on those issues.

(f) I am not persuaded that the bespoke amendment substituting a new clause 39A.6.4 adds much, if anything, to the adjudicator's duties. There are only two standards of proof known to the law of Scotland, namely that applicable to civil disputes (being on a balance of probabilities) and that applicable to criminal proceedings (being beyond reasonable doubt). It seems improbable that any adjudicator would apply the criminal standard to adjudication proceedings, but it may be that this is all that was sought to be made clear by the amendment. I do not consider that the amendment makes it necessary for an adjudicator to require witnesses to give evidence on oath or affirmation; indeed, the adjudicator does not need to hear witnesses at all. "Proof" in this sense is not necessary. Clause 39A.6.5 remains unaffected by the bespoke amendment, and this entitles the adjudicator to set his own procedure and at his absolute discretion to take the initiative in ascertaining the facts and the law as he considers necessary. He may use his own knowledge and/or experience, open up, review and revise any certificate, opinion, decision, requirement or notice, visit the site of the works, obtain such information as he considers necessary from any employee or representative of the parties and others, etc. It is clear that his powers go far beyond the powers of a judge in civil proceedings, and the proceedings themselves bear little relationship to any arbitration or litigation. As already observed, they may be inquisitorial in nature, the adjudicator may use his own knowledge and may not require "evidence" in the legal sense of that word. All that the bespoke amendment requires him to do is to reach his decision on the balance of probabilities.

The argument under Answer 7.7(vi) of the defences - breach of the rules of natural justice

"The result was that the contractor, who now seeks to avail himself of the incident in order to attack the award, was completely successful so far as that point was concerned. I am unable to see any possibility of injustice in what was actually done...."

This reasoning was upheld in the House of Lords. In the present case, if I am correct that the amount for which the adjudicator found in favour of the pursuers in paragraph 73 was the absolute minimum to which he considered that they were entitled, and that there was no possibility of any deductions being made consequent upon further procedure, I see no possibility of injustice or prejudice to the defenders.

The argument under paragraph (2) of the defenders' Note of Argument (No.11 of process)

"For declarator that, save in any litigation which may be launched to determine whether or not the pursuer is entitled to damages from the defender ....and until any such litigation may finally resolve all dispute about that matter, the defender may not in any proceedings to which the pursuer is party, deny....".

The conclusion is therefore framed in the negative, not the positive. However, the contractual effect of the adjudicator's decision is to be found at clause 39A.8.1 of the contract, which reflects section 108(3) of the 1996 Act. This merely provides that the decision of the adjudicator shall be binding on the parties until the dispute or difference is finally determined. The defenders may deny their liability as much as they wish, even though they are contractually obliged to comply with a valid adjudicator's decision and its effect. Any declarator should therefore be cast in the positive. Moreover, there were proceedings which might determine the issues and end the provisional binding nature of the adjudication; for example, this could arise in an action in which the defenders were third parties, or in an action by the defenders for payment of sums which they claim are due to them under the contract. The terms of any declarator should leave the defenders free to argue these points in any proceedings which might determine the issue.