HL 27 July 2000. Employer, a local authority, engaged the contractor, S, to construct a bypass under a contract incorporating an amended form of the ICE Standard Form of Contract, 5th edition. Clause 66 of the contract allowed for any disputes to be settled by the engineer. S then engaged a subcontractor to supply the surfacing for the carriageway under a contract incorporating, with amendments, the FCEC Standard Form of Subcontract. Clause 18 of this contract provided for any dispute under the subcontract to be referred to arbitration. However, Clause 18(2) allowed the contractor to serve notice on the subcontractor requiring the dispute to be to be dealt with jointly under the main contract. Disputes arose under both contracts. L gave notice of its intention to to refer its dispute to arbitration. S announced it was entitled to proceed by negotiation with the employer. S failed to engage the engineer and L sought a a declaration that S had waived its right to rely on Clause 18(2). Judge dismissed summons. CA allowed L's appeal. HL dismissed contractor's appeal. (Full judgement available on http://www.parliament.the-stationery-office.co.uk/pa/ld/ldjudinf.htm