A Special Purpose Vehicle terminated its design and build contract with a renewable energy contractor and abandoned its biomass generating plant project. It obtained summary judgment on a second adjudication award, against the contractor, for nearly £10 million but, although the contractor was unsuccessful in challenging enforcement of the award, it asked the court to stay execution.
This was, said the court, an unusual case. The claimant had become an SPV with no P (because it had chosen not to continue with the Project). That meant that, not only did the SPV have no possible incentive to remain in existence for a minute longer than necessary, once it had repaid its debts to its parent, but it was also overwhelmingly likely that it would be wound up sooner rather than later. The risk faced by the contractor, of overpaying and never being repaid, was very real and could not have sensibly been predicted when the contract was agreed. In addition, even if the SPV did remain in existence so as to resolve all outstanding arguments, that could take months or years. Under the contract the defendant was stuck with the adjudication decision until the final accounting process was concluded, and the contract was silent as to when that should take place.
The court was entitled to consider that there was a bona fide challenge to the result of an earlier adjudication, on extensions of time, which was the basis of the decision in the second adjudication. That was a relevant factor when considering a stay. Some form of stay was necessary, a view confirmed by the deliberately limited, and unsatisfactory, financial information made available by the SPV. The court ordered a partial stay. The contractor had to pay £4.5 million without qualification and bring £1 million into court but the court imposed a general stay in respect of the remaining £4.5 million plus.