Interpreting valid dispute resolution clauses

In the first case, Kajima Construction Europe (UK) Ltd  & Anor v Children's Ark Partnership Ltd, the dispute resolution clause in a contract provided that "all disputes shall first be referred to the Liaison Committee for resolution. Any decision of the Liaison committee shall be final and binding, unless the parties otherwise agree".

With a limitation period about to expire, one party commenced proceedings without referring the dispute to the Liaison Committee. The other side sought a strike out of those proceedings.

The Court of Appeal found that the dispute resolution clause was not enforceable on the basis that the clause was too uncertain to be enforceable: there was no description of how the Liaison Committee would seek to resolve the dispute and no unequivocal commitment to engage in alternative dispute resolution. Also, it was not clear when the Liaison Committee referral would come to an end (and so proceedings could be commenced).

The Court of Appeal also held that the Liaison Committee was "fundamentally flawed" because it was made up of representatives of only one of the parties – the other party had no right to attend or make representations. Any binding contractual dispute resolution process must "contain a definable minimum duty of participation".

In the second case, University of the Arts London v Legal & General Pensions, the dispute resolution clause was valid but the parties disputed how it should be interpreted. 

The clause provided for expert determination and that "If any Party is dissatisfied with any decision of the Expert that Party shall within 20 Working Days after receiving Notice of the Expert's decision give to the other Party Notice requiring the relevant matter dispute or difference be referred to court proceedings". 

Was time of the essence for this clause? If so, even a very slight delay in giving notice would mean the dispute could not be litigated (here, notice was not given until 39 days after notice of the expert's decision).

Master Pester held that, despite the clause not using the words "time is of the essence", that was the effect when the clause was looked at in the wider context of the contract. The consequence of failing to give notice was that the expert's decision became final and binding and "commercial common sense" supported the view that the parties would wish to resolve a dispute as quickly as possible.