ADJUDICATOR’s DECISION SUPERSEDES INCONSISTENT CONTRACT TERMS

Levolux AT Ltd v Ferson Contractors Ltd [2003] EWCA Civ 11 (unreported, 22 January 2003)

In Levolux AT Ltd v Ferson Contractors Ltd [2003] EWCA Civ 11 (unreported, 22 January 2003) the central issue before the Court of Appeal was whether, pending final resolution by arbitration or litigation, an adjudicator’s decision should be enforced in derogation of contractual rights with which the decision may conflict. It was held that the adjudicator’s decision was enforceable against the defendants notwithstanding the existence of a clause in the contract between the parties which stated that, if the defendants determined the contract, then all sums of money then due by the defendants to the claimant would cease to be due. The court held that, as a matter of interpretation, this clause did not provide the defendants with a defence to a claim brought by the claimant to enforce an adjudicator’s decision. Perhaps more importantly, the court held that, to the extent that the clause could not be interpreted consistently with s108 of the Housing Grants, Construction and Regeneration Act 1996 (hereafter ‘the 1996 Act’), it must be struck down. In this way the statutory provisions will supersede inconsistent terms of the contract between the parties.