Outer House finds no breach of natural justice in Adjudicator’s finding that time is “at large”

The recent Outer House decision in Entexol Limited v Sked Construction Limited [2026] CSOH 80 emphasises that the Scottish courts remain reluctant to interfere with the interim binding decisions reached by adjudicators. This decision also demonstrates the benefit of obtaining strategic and commercial advice before commencing any form of dispute resolution proceedings.

Background

The decision in Entexol Limited v Sked Construction Limited concerned a dispute between a contractor and subcontractor that was referred to adjudication and in which sought to advance a contra-charges claim in respect of costs that it alleged incurred due to the sub-contractor’s delay in completing the sub-contract works.

In the adjudication, and in support of its contra-charges claim, the contractor asserted the completion date had been fixed in an instruction that it issued via email to the subcontractor. The adjudicator rejected that assertion, stating that the email did not constitute an instruction and, in any event, “a binding agreement as to timely completion cannot be a unilateral instruction”.

In the adjudication, the subcontractor was seeking payment of sums considered due to it and had not put the issue of the completion date before the adjudicator for determination – that issue arose solely as a result of the contractor’s defence regarding the validity of its claim for contra charges.

In his decision, and as part of dealing with the contractor’s contra charges defence, the adjudicator considered that there was no fixed date for completion of the subcontract works and, as a result, time was “at large” (meaning that the subcontract works were to be completed within a reasonable period of time as opposed to by any set date) and that the contractor had not justified its contra charges claim as it had not provided any analysis which showed that the subcontractor “had failed to complete the works in a reasonable time”.

In a second adjudication between the parties, the adjudicator concluded that the subcontractor was entitled to payment of c. £110,000.

The contractor’s challenge to the decision

The contractor refused to make payment and, when the subcontractor sought to enforce the decision, the contractor argued that the adjudicator’s decision was not enforceable due to a breach of natural justice. In particular, the contractor contended that, as neither party had put to the adjudicator that time may be “at large”, the adjudicator had gone off on a “frolic of his own” by making that determination. The contractor asserted that the adjudicator should, instead, have informed the parties of his view that time was “at large” and invited them to make further submissions as to what would have been a reasonable period for completion in the circumstances.

The subcontractor accepted that neither party had suggested that time was “at large” but submitted that this aspect of the adjudicator’s decision arose simply because the contractor had failed to discharge the burden of proof and demonstrate that there was a fixed date by which the works must be completed.

Lord Lake’s decision

The contractor’s challenge was rejected by Lord Lake in an admirably short judgment.

In reaching his decision, Lord Lake explained that:

• in order to decide whether the contractor was entitled to apply the contra charges in question, the adjudicator had to first consider whether he accepted that the subcontract works were to be completed by a specified date;
• as the adjudicator did not accept that the subcontract works required to be completed by a specified date, and the contractor did not advance any alternative arguments regarding an implied obligation to complete within a reasonable time (and what a reasonable time would be in the circumstances), this decision “had the consequence that the defender had not established a key element of this part of their case and the contra charge would not be allowed”;
• the adjudicator had not carried out any investigations of his own and had simply rejected a fundamental element of the contractor’s contra charges defence;
• in light of the above, the statement that time was “at large” was, in fact, “something of a red herring” as this was simply the consequence of the adjudicator’s decision regarding one of the sub-issues in dispute (i.e. whether or not the works required to be completed by a particular date) and did not impact on the outcome; and
• it was not necessary and not practical for the adjudicator to canvass the parties’ views on this point, particularly where no such requirement exists in a court setting and adjudication is designed to be a “speedier and more informal” means of dispute resolution.

Concluding thoughts

It seems clear that a lot of time and expense could potentially have been avoided had the contractor advanced an alternative position regarding an implied obligation to complete the works in a reasonable time and – importantly – evidenced what that reasonable period of time would be. This emphasises the benefit of obtaining strategic and commercially focused advice in advance of referring a dispute to adjudication and being ready to support all lines of defence that are to be run.

Given the value of the sum awarded in the adjudication, it might be questioned why, from a cost/benefit analysis, the contractor saw fit to challenge the enforceability of the adjudicator’s decision in the Court of Session. It is well documented that the Scottish courts will almost always summarily enforce an adjudicator’s award, unless there is a clear breach of natural justice or the adjudicator exceeds their jurisdiction and Lord Lake’s decision is a further example of this. In light of the facts, the judgment does not come as a surprise.

If you have any questions regarding the information discussed in this article, please contact Fraser Hopkins and Kate Ross.