The Scottish and English courts strongly discourage poorly founded challenges to the enforcement of adjudicators' decisions. ATG Services (Scotland) Ltd v. Ogilvie Construction Ltd [2024] CSOH 94 is another example of an unsuccessful enforcement challenge.

The parties disputed an interim application for payment. The contractor (Ogilvie) refused to pay the sum claimed by the subcontractor (ATG). ATG adjudicated for payment.

Ogilvie argued that ATG's payment application had not been served in accordance with the contract, rendering it invalid. In response, ATG relied on: (i) evidence that the parties had adopted a course of conduct which treated applications served other than in accordance with the contract's provisions as nonetheless valid; and (ii) judicial observations made in an English case (Jawaby 1). The adjudicator concluded that the payment application was valid. In the absence of a valid pay less notice, Ogilvie was ordered to pay just over £1 million - but did not do so.

ATG launched enforcement proceedings, which Ogilvie defended by arguing that the adjudicator had gone off on a frolic of his own and was in breach of natural justice. In particular, Ogilvie argued that: (i) the adjudicator had acted inappropriately by relying upon English case law without hearing submissions on whether it reflected established principles of Scots law; and (ii) in the absence of proper notice, Ogilvie was materially prejudiced by being deprived of adequate opportunity to respond.

The judge found Ogilvie's defence entirely without merit. The adjudicator was justified in considering ATG's submissions, including the English decision references. Jawaby Property Investment Ltd v. Interiors Group Ltd [2016] EWHC 557 (TCC) had been cited in the adjudication to demonstrate the legal principle that payment notices submitted through alternative means to that required by the contract, where agreed by the parties, are valid with the effect here that payment was due. Fixating on distinctions between English and Scots law was an immaterial distraction from the "true questions in this case". The adjudicator was entitled both to apply the legal principle as he had and to find that his conclusion was "in line with" Jawaby.

Further, as many previous court decisions have made clear, adjudicators can get the law wrong and still produce a decision that is binding and enforceable until the dispute is finally resolved by agreement or by a final tribunal.

The judge also: (i) found Ogilvie's conduct in maintaining their defence to enforcement unreasonable behaviour, justifying an enhanced award of expenses against Ogilvie; (ii) reinforced the legislative policy behind the Construction Act of "pay now, argue later"; (iii) cautioned parties against raising frivolous defences, especially those questioning adjudicators' professionalism or competence "in this case without the slightest warrant"; and (iv) reiterated that the court's function is not to act as a general appeal tribunal on adjudicators' decisions.

It is not unusual for English case law to be cited in (and/or referred to favourably by) the Scottish courts. It is clear from this case that it will not be a breach of natural justice for an adjudicator to apply a legal principle with reference to an English case. If an adjudicator fails to apply a legal principle correctly, that is an error they are entitled to make.

Where clients insist on challenging the enforcement of an adjudicator's decision on poor grounds, they should also be warned to expect both failure and an enhanced award of costs against them.

With thanks to Alex Wendelen-Dickson for his help in preparing this article which was first published in Construction Law on 2 December 2024.