The Technology and Construction Court has decided that judgment should not be stayed following a contractor's unsuccessful defence of an adjudication claim brought by its M&E subcontractor.

The case reaffirmed some key principles in assessing whether a stay is justified in adjudication enforcement proceedings:

  1. The subcontractor was not required to provide confidential information to answer the contractor's allegations of insolvency.
  2. The contractor had to show that the subcontractor was insolvent, or that where the subcontractor was probably unable to pay its debts, that the subcontractor's financial situation had worsened since it entered into contract with the contractor. It had failed to do so in this case.
  3. The contractor could not rely on disputed claims against the subcontractor to show insolvency.
  4. A later adjudication alleging that large sums were owed to the contractor by the subcontractor did not merit a stay of enforcement of the first adjudication decision. The second decision was expected 28 days after the enforcement proceedings for the first adjudication. The outcome of that adjudication therefore was not sufficiently certain to justify a stay of enforcement in the current proceedings.

Farrelly (M&E) Building Services Limited v Byrne Brothers (Formwork) Limited