Construction: Adjudicator’s powers survived “binding settlement”

Section 108 of the Housing Grants Construction and Regeneration Act 1996 says:

“(1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.”

Where there is a dispute as to whether there has been a full and final settlement agreement between the contractual parties does the dispute arise “under” the construction contract or under the alleged settlement agreement or both?

In J Murphy & Sons Ltd v W Maher and Sons Ltd [2016] Murphy issued proceedings seeking a declaration that the adjudicator had no jurisdiction to entertain a dispute arising out of an alleged final settlement since:
– the alleged settlement agreement was a standalone agreement and
– there was no adjudication agreement applicable to that agreement and
– the disputed claim did not arise “under” the original sub-sub-contract.

The High Court said that adjudicator had jurisdiction because the adjudication clauses in the sub-sub-contract survived and were broad enough to cover a dispute arising under the alleged settlement agreement because that later agreement undoubtedly arose in connection with the original sub-sub-contract.

“A dispute as to whether all or some of the alleged entitlements which one contractual party has against the other has been settled in a binding way arises “under” the original contract.”

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.