"Pay now, argue later" was the resounding message coming from Mr Justice Simons in Aakon Construction Services Limited v Pure Fitout Associated Limited  IEHC 562
The Construction Contracts Act2013, which came into effect in 2016, gives a party on a construction contract the right to refer a payment dispute to adjudication at any time. The Act intends to improve cash flow and reduce the cost of resolving disputes by ensuring disputes are resolved by an Adjudicator within a short time frame. The losing party is duty bound to pay on foot of the Adjudicator's decision.
This case gives us a helpful insight into the purpose of the Construction Contract Act 2013, the binding nature of an Adjudicators decision, and the matter of multiple disputes under the Act. The case also highlights significant differences between the 2013 Act and equivalent legislation in the United Kingdom.
Referring to a recent decision in Principal Construction Ltd v. Beneavin Contractors Ltd  IEHC578, Mr Justice Simons found that the purpose and aim of the Construction Contract Act 2013 is to:
On the binding nature of an Adjudicators decision, Mr Justice Simons had this to say:
The Adjudicators decision gives rise to an immediate payment obligation, notwithstanding that the Adjudicator's decision is amenable to being overreached by a subsequent decision of an arbitrator or a court. A courts scope, in exercising its discretion to grant leave to enforce an Adjudicator decision is narrow
It has been argued that a party may only refer a single dispute to adjudication under the 2013 Act. If multiple disputes were brought forward to adjudication, it could render the adjudication process null and void. This was found not to be the case by Mr Justice Simons where he decided in para. 99 and 100 of his decision that S.6(9) of the Construction Contracts Act 2013 expressly provides that an adjudicator may deal at the same time with several payment disputes arising under the same construction contractor related construction contracts.
Therefore, there is no restriction under the domestic legislation on a party referring more than one dispute to an adjudicator.
Para. 17 of Mr Justice Simons decision alerts the reader that UK case law cannot simply be "read across" to the Construction Contracts Act 2013 because the domestic legislation differs in a number of respects from the equivalent legislation in the United Kingdom.
The differences mentioned by Mr Justice Simons are:
It is of great interest for the Construction Industry to see decisions being handed down under the Construction Contracts Act 2013, that give the industry some clarity on how the Act should be interpreted. More importantly, the Construction Industry should be very pleased to see that the Irish courts are fully behind the Act's intent by ensuring the losing party pays an Adjudicators decision without delay. The "Pay now, argue later" drum is certainly beating loud and clear in the Irish High Court when dealing with Adjudicator's decisions under the Construction Contract Act 2013.
For more insight into this blog, please contact Peter McCarthy by email firstname.lastname@example.org or 00353 86 7816358