ISG Construction Ltd v English Architectural Glazing Ltd  EWHC 3482 (TCC) [May 2020]
Parties do not always go to court to recover money. As an example, a party may require a declaration from the court as to its contractual rights. Such declaration may be sought in, what are referred to as, Part 8 proceedings provided the question asked is unlikely to involve a substantial dispute of fact. Part 8 proceedings are generally less adversarial, more cost effective and more quickly resolved than Part 7 proceedings (used when a party wants to recover money).
In this particular case, the claimant was dissatisfied with the adjudicator’s decision and started Part 8 proceedings for the court to finally determine certain discrete substantive issues decided by the adjudicator and the ambit and effect of the adjudicator's decision.
The claimant said that Part 8 proceedings were appropriate because the issues raised short points of contract interpretation and did not involve substantial factual matters. The claimant also stated that the proceedings could finally and conveniently determine that the adjudicator’s decision was wrong.
The defendant’s position was that Part 8 proceedings were not appropriate because issues of fact and law would have to be resolved to determine the issues decided by the adjudicator.
The court made clear that it did have jurisdiction to grant Part 8 declaratory relief in the context of adjudications in appropriate cases. Whether it was appropriate depended on certain questions, for example:
1. At what stage and for what purpose(s) the Part 8 procedure was being invoked?
2. Are the issues in question capable of being resolved under Part 8 i.e. without resolving disputed questions of fact?
3. Will resolving the issues in question serve a useful purpose or do justice between the parties?
The court declined to make declarations in either party’s favour because "it would not be proper…to proceed on the basis that it is always in the best interests of the parties to engage in a diet of serial adjudications, supplemented as required by a series of applications to the TCC seeking enforcement or Part 8 declaratory relief. In appropriate cases the parties' interests might be better served by persuading the TCC to exercise its case and cost management powers to enable their disputes to be finally determined in an expeditious and cost-effective manner."
That decision highlights the court’s view that the most cost-effective method of resolving multiple disputes between parties may not be best achieved by starting Part 8 proceedings (as the industry and legal profession may have at times perceived)…over and over again. Should you wish to discuss the best means of resolving your disputes, please contact us and we will be happy to assist.