ADJUDICATOR HAS NO JURISDICTION IN RELATION TO SETTLEMENT AGREEMENT

Shepherd Construction Ltd v Mecright Ltd ([2000] BLR 489)

In Shepherd Construction Ltd v Mecright Ltd [2000] BLR 489 HH Judge Humphrey LLoyd QC held that a dispute between two parties relating to the validity of a settlement agreement entered into between them was not a dispute arising under a construction contract so that it fell outside the scope of s108 of the Housing Grants, Construction and Regeneration Act 1996 (hereafter ‘the 1996 Act’). This being the case, the claimant was held to be entitled to a declaration that the adjudicator had no jurisdiction to resolve the dispute which had been referred to him. Further, Judge LLoyd emphasised the significance of the word ‘under’ in s108(1) of the 1996 Act which has the effect of excluding from the scope of adjudication matters which precede the making of the contract and also matters which fall outside the scope of the contract, such as a settlement agreement.