It's elemental, essentially an adjudicator's decision is binding

The recent case of Essential Living (Greenwich) Ltd v Elements (Europe) Ltd [2022] EWHC 1400 (TCC), provides helpful clarification on the binding effect of adjudication decisions on interim accounts for the purposes of future final account assessments.

The dispute arises from a mixed-use development in Southwest London known as Greenwich Creekside. Essential Living engaged the Defendant (Elements) in December 2016 to carry out the design and construction of the modular units for the project under an amended JCT Construction Management Trade Contract 2011.

Prior to practical completion in May 2019, the parties adjudicated on the last interim valuation account. In his Decision, the Adjudicator determined Elements’ variation and extension of time claims and awarded liquidated damages.

In the final account process Elements sought to reopen the various variations and delay matters which were determined by the Adjudicator's 2019 Decision. Essential Living sought Part 8 declarations from the Court to the effect that Elements remained bound by the 2019 Adjudication Decision.

Elements argued in response that those determinations were irrelevant to the question of the value of the final account because they were made in the context of an interim valuation.

The court determined that it is a basic principle of adjudication that the decision of an adjudicator is final and binding pending final resolution.

Accordingly, where the Adjudication Decision determined discrete issues of entitlement or valuation (such as on variations), those determinations are binding on Elements for the purpose of ascertaining the Final Account, unless and until those matters are finally resolved by litigation or settlement, or unless Elements advances claims on a fresh basis.

However, the Construction Manager (and consequently any subsequent adjudicator) is entitled to review previous assessments regarding extensions of time following practical completion and reach a different assessment, by virtue of the express power of review in clause 2.27.5 of the JCT Contract.