Executive summary

Fraser J rejected seven grounds for resisting enforcement of an Adjudicator's decision in a case that acts as a salutary reminder that the Court will not entertain "insubstantial" arguments "advanced for tactical reasons" in order to avoid compliance.

The facts

The Claimant, Ground Developments Limited ("GDL"), is a ground engineering contractor who undertook works for the Defendant, a Joint Venture described as "Merseylink Civil Contractors JV" ("the JV") in relation to the construction of a new six lane toll bridge road over the River Mersey.

GDL submitted three Applications for Payment which were not paid by the JV. The total sum alleged to be outstanding was £198,008.90 plus VAT. GDL referred the dispute to Adjudication.

The matter was complicated by the fact that there was a disagreement about the nature and terms of the Contract. The JV sought to capitalise on this in its Defence.

GDL's position was that there was a Contract concluded on the terms set out in its letter dated 8 August 2015. There being no Adjudication provisions, the GDL asserted that the Scheme applied. At the time, it believed the JV's position was that NEC3 applied. This imported the TeCSa Adjudication Rules and required the nomination of an Adjudicator by ICE.

In the circumstances, GDL sent an application for nomination to ICE and explained that the "type and content of the contract" was in dispute. ICE appointed Mr Edwards as Adjudicator.

In fact, the JV's position was changeable. It asserted no less than eight alternative positions on the nature and terms of the Contract prior to, during the Adjudication and in support of its arguments to avoid enforcement. It also avoided stating or taking a primary position.

The "uncertainty" in the nature of the contractual relationship was a core theme in the JV's reasons why the Adjudicator's decision should not be enforced and, it seems, a core reason why the Judge rejected these arguments. Mr Justice Fraser was not impressed with the approach taken by the JV in circumstances where it had introduced the uncertainty for tactical reasons.

The decision

The JV raised seven different grounds of challenge which can be summarised as follows. These were all rejected:

  • Defences 1 – 2 concerned the nature of the "dispute" referred and "dispute" decided. The suggestion being that the "dispute" referred was a lack of pay less notices (i.e. a contractual argument) and the "dispute" decided was valuation. This was rejected both on the facts and in principle. The Judge found that the dispute referred was the JV's failure to pay and, ultimately, this was decided on the lack of pay less notices in any event.

  • Defences 3 – 5 alleged (in varying forms) that the Adjudicator had been invalidly appointed due to the "uncertainty" of the contractual relationship. The JV relied on Twintec and Pengrum as authority for the proposition that unless the Adjudicator is appointed under the correct contractual provisions the appointment would be a nullity. The Judge accepted that authority but distinguished in on the facts. He found that the Claimant had been clear on its position and had also made it clear within the application that there was a dispute as to the nature and terms of the Contract. In this case, the Claimant had applied for a nomination under the Scheme, the Adjudicator was appointed by ICE on that basis and had operated the Adjudication under the Scheme. The JV had not objected to that.

  • Defences 6 and 7 sought to have a contested Trial on the issue of the contractual relationship and suggested that, in order to succeed on its application for summary judgment, the Claimant had to show that the JV's contractual argument had "no real prospect of success". This was rejected in principle as the very nature of Adjudication and the enforcement process is to enable parties to obtain a speedy decision which is enforceable.

Conclusion

In this Judgement, Fraser J noted the JV's attempt to introduce uncertainty and obfuscate the issue concerning the nature and terms of the Contract in order to advance its own position and avoid paying sums to GDL which the Adjudicator had decided were due.

This case also demonstrates the possible dangers of raising any and every argument to later try and resist enforcement. It is another reminder that, if you have a valid challenge to enforcement, it might be better to simply make it and not attempt to throw in everything but the kitchen sink.