Breaking A Contractual Hierarchy Of Dispute Resolution Processes

The Court of Session has considered whether court proceedings can be raised to interrupt time bar, despite a contractual provision requiring adjudication before litigation.

The issue

Construction contracts often provide a hierarchy of dispute resolution processes. Before a party is permitted to litigate (or arbitrate), it is often required to attempt to resolve the dispute through another method (or methods) of dispute resolution. Structured negotiation, mediation, expert determination and adjudication are common prerequisite steps.

A difficulty arises when a disputed claim is nearing time bar (i.e. prescription or limitation). In order to interrupt time bar and preserve the claim, a party must litigate or arbitrate (unless some other relevant acknowledgment has been made). However, what if there isn't enough time to carry out the prerequisite contractual steps first?