Set-off and withholding against an adjudicator award

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Legal and contractual solutions · Adjudication

When may a party set off a contractual cross-claim against an adjudicator's monetary award?

Immediate compliance, express contractual rights and competing adjudication decisions

The starting point is compliance with the adjudicator's operative order. A party cannot ordinarily avoid payment by raising a cross-claim that was available in the adjudication or by relying on a termination or set-off clause in a manner that defeats the decision.

Quick answer

Pay the sum ordered unless the decision itself, a compatible express provision or another binding decision supplies a clear set-off right

Whether set-off is available depends on the precise adjudication decision, the contract wording, the nature and timing of the cross-claim, and whether the proposed deduction would contradict what the adjudicator decided. Earlier authority allowed an express preserved right of set-off, but later appellate authority required immediate payment where reliance on a termination provision would defeat adjudication. A second binding adjudication decision may sometimes be set against the first. Do not issue a fresh notice or invoke a general clause without checking whether that course is legally compatible with the award.

IssuePosition
Decision orders payment without qualificationImmediate payment is the starting point
Cross-claim decided or rejectedCannot be reintroduced as set-off
Express compatible set-off rightMay apply on its wording
Termination clause defeats paymentLikely enforcement risk
Two binding monetary decisionsNetting may be available

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