Stop the clock

Posted: 8th January 2014

Stop clockWhen an adjudication decision is made in a contractual dispute, does the 'clock' start again for bringing an action? That was the question before the Court of Appeal recently.

In the case in point, the 'loser' in a construction contract dispute which was decided by arbitration wished to contest the arbitrator's decision in court.

The alleged breach of contract that was the subject of the dispute occurred in 2004/5 and the arbitration was completed in 2009, with the arbitrator ordering a payment of more than £650,000. The payment was made, but in 2012 the paying company brought proceedings to obtain repayment of the money.

The firm that had been paid argued that the claim was 'out of time', the breach of contract having been more than six years prior to the commencement of the court proceedings and therefore outside the limitation period  for such a claim.

The High Court ruled that the action was out of time. However, the paying firm appealed to the Court of Appeal, which overturned the original decision, accepting the argument that the arbitrator's decision has 'set the clock running' again.