Adjudicator Cannot Change Mind, Rules Court

In the context of a dispute between parties to a building demolition contract, the High Court has ruled that an adjudicator was not entitled to change his mind after reaching a final decision and that, subject to further litigation or arbitration, the parties are bound by his original determination, ‘whether it is right or wrong’.



In his first determination, the adjudicator had directed the main contractor to pay the subcontractor £167,501. He said that the main contractor had no entitlement to liquidated damages in respect of delays in completion of the project. In a second determination, the adjudicator purported to change his mind on that issue and awarded the main contractor £184,813, which included liquidated damages of £105,000. The subcontractor refused to pay the liquidated damages element of the award on the ground that the question of liquidated damages had been dealt with in the first adjudication and so could not be reintroduced in the second adjudication.



In upholding the subcontractor’s plea that the liquidated damages award was not enforceable, the Court ruled that the adjudicator’s first decision was final and binding on the parties and that it was not open to him to subsequently change his mind.



The Court concluded that ‘since the parties are bound by the adjudicator’s (first) decision that the absence of any loss in respect of delay precluded the main contractor from claiming liquidated damages, that conclusion, until finally determined by litigation or arbitration, remains one with which the parties are bound to comply. It matters not whether it is right or wrong.’