Adjudication is still in the early stages in Ireland and will benefit from more case law. There is particular uncertainty around the extent that crossclaims, such as liquidated and ascertained damages, can be used to limit financial exposure: adjudicators in Ireland have taken different positions on the issue.
However, in two significant decisions in 2021 the Irish courts have shown they will enforce adjudicators’ decisions unless, as in the UK, the adjudicator lacks jurisdiction or breaches the rules of natural justice. The courts have stressed, however, that the vast body of UK case law is of only limited relevance given the differences in Ireland’s legislation.
Adjudication in Canada
The landscape of SOP legislation is fragmented across Canada, with different legislation for each province and territory.
Concerns raised by industry bodies lead to federal prompt payment legislation being announced in 2018. Receiving royal assent on 21 June 2019, the Federal Prompt Payment for Construction Work Act addresses non-payment of contractors and subcontractors performing work for federal construction projects. The date of its official enactment remains undetermined but, once in force, the Act may cause some disruption in that it provides for a one-year deferral period before being applied to existing contracts.
Adjudication in Hong Kong SAR
In October 2021, the Hong Kong Special Administrative Region Development Bureau released a new technical circular setting out the implementation of SOP provisions in public works contracts for the purpose of “facilitating timely processing of contract payments and providing an interim mechanism for speedy resolution of payment disputes before the enactment of the Security of Payment Legislation (SOPL)”.
Instead of following the footsteps of UK, Australia and Singapore in enacting SOP legislation, Hong Kong SAR has ventured into uncharted territory with the circular requiring implementation of SOP provisions purely by contractual arrangement.
Adjudication in South Africa
South Africa does not yet have a statutory framework regulating adjudication as a dispute resolution mechanism. Adjudication is, however, widely adopted in the South African construction industry on major infrastructure and energy projects, through the dispute resolution clauses contained in most standard form construction contracts i.e. FIDIC, NEC and JBCC. There is no limit as to what types of dispute can be referred to adjudication, with most contracts requiring all disputes that arise under the contract to be referred to adjudication as the first step in a multi tired dispute resolution process.
The South African courts have recognised the importance of adjudication in resolving disputes on construction projects, describing it as “a measure for the summary and interim resolution of disputes, subject to their final resolution by arbitration where appropriate”. There is consistent judicial precedent confirming the binding and enforceable nature of an adjudicator's decision until such time as it is replaced by an arbitral award. Accordingly, the South African courts will only interfere in an adjudicator’s award in limited circumstances, namely a material procedural irregularity or a lack of jurisdiction on the part of the adjudicator.
As in Ireland, adjudication in South Africa is still in the early stages of its legal development and will benefit from further judicial precedent. In the absence of a statutory framework regulating the adjudication process, an issue that often arises in practice is that the parties to a dispute which requires adjudication as a first step in the dispute resolution process often mistakenly treat adjudication as a form of mini-arbitration, extending the adjudication timetables prescribed in the standard form contracts. The result is that the purpose of adjudication – to have disputes resolved expeditiously on an interim but binding basis during the course of the project – can be eroded.