The High Court in Ireland addressed interest for late payment in adjudication decisions in a judgment in Finnegan Contracts Ltd v Killycard Developments Ltd [2024] IEHC 752.
The proceedings concerned an application to enforce an adjudicator's decision. The Court was satisfied that there was nothing in the procedural history or substance of the decision to prevent the Court from granting an enforcement order.
There was one question, however, as to the correct approach to the part of the decision dealing with interest for late payment. The adjudicator had fixed a rate of €38.10 for each continuing calendar day. The Court considered that it should give effect to the rate of interest in the adjudicator's decision post-High Court judgment for two reasons:
- First, giving effect to the rate of interest post-judgment best reflected the underlying rationale and objective of the Construction Contracts Act 2013, which was to give full effect to the adjudication process and to treat an adjudication award as if it were enforceable pro tem (for the time being) as a judgment or order of the High Court.
- Second, in the case of a commercial dispute, the ordinary approach was that, having identified the principal sum, the court order states that interest continues to accrue at the contractual rate. The Court considered that, in this context, the adjudicator's award of interest was analogous to the rate of interest fixed under a contract. There was no suggestion that the adjudicator had not had jurisdiction to impose the interest rate, nor that the rate was penal or otherwise disproportionate.
This outcome follows the broad trend of judgments we have previously considered. The Irish Court has again taken a robust approach supportive of adjudication, which is the expedited dispute resolution mechanism provided for under the Construction Contracts Act 2013.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
