Construction Law Update: Judicial Review should not halt an Adjudication Process
The High Court in Ireland has given guidance on how applications to judicially review the decision of an adjudicator, while the adjudication process is ongoing, will be treated.
In K&J Townmore Construction Ltd v Damien Keogh and Deslend (Mechanical) Ltd t/a Cobec Engineering Group  IEHC 509, an adjudicator was appointed to resolve a payment dispute under a sub-contract between the contractor and sub-contractor. The contractor claimed that the adjudicator lacked jurisdiction because the dispute referred was not a “payment dispute”, as required by the Construction Contract Act 2013 (the “Act”).
When the adjudicator decided that he would not resign, the contractor sought to challenge that decision by applying to the High Court for leave to bring judicial review proceedings.
In the High Court, the contractor explained its reasons for arguing that the dispute was not a payment dispute: the payment claim was premature and invalid by reason of its timing, and an element of the claim related to loss and expenses arising from delay and disruption.
However, Mr Justice Twomey indicated that the key question was whether the High Court should determine the challenge to the adjudicator’s decision before the adjudication process is complete, in a judicial review, or after the adjudication process is complete, in the enforcement proceedings envisaged under section 6(11) of the Act and Order 56B of the Superior Court Rules.
Expedition is Key
Mr Justice Twomey refused to grant leave to the contractor for judicial review, with the effect that the adjudication would continue.
The key takeaway is that jurisdictional disputes regarding an adjudicator appointed under the Act are to be dealt with at the enforcement proceedings stage of the adjudicative process, after the adjudicator’s decision has issued.
The Court highlighted that the intention of the Act is to provide for a speedy and relatively cheap way of resolving construction disputes. If this means that an adjudicator’s jurisdiction cannot be challenged in judicial review proceedings in advance of an adjudicator reaching a decision and, instead, must be challenged in enforcement proceedings after issue of the adjudicator’s decision, that is a price the Oireachtas regards as worth paying for a cheaper and quicker alternative to litigation in the construction industry.
The Oireachtas had determined that the public interest favoured a ‘pay now, argue later’ system for the resolution of payment disputes under construction contracts. Permitting a party to impose expensive and slow litigation on this process would run completely contrary to the intention of the Oireachtas, as well as providing an incentive for employers or main contractors to delay payments to contractors or sub-contractors by judicially reviewing any adjudication process.
The High Court previously stayed an adjudication process pending the hearing of a judicial review, as we considered here. However, this latest judgment brings a degree of clarity in that the Courts will now be unlikely to entertain a judicial review application challenging jurisdiction of the adjudicator during the process.
The Courts have yet to give a definitive answer to the question of whether judicial review would be available to a party seeking to challenge an adjudicator’s final decision once made. However, where a party wishes to make a complaint on jurisdictional points, it is clear these can be raised in enforcement proceedings and that the Court has a discretion not to grant judicial review where there is an alternative remedy.