Court's rare decision against enforcing the adjudicator's verdict
- AuthorSuryen Nullatamby
The recent Level 1 Raised Flooring Ltd v JM Construction (SW) Ltd 2023 case is a rare example of the court refusing to enforce an adjudicator’s decision. In this case, it was held that the adjudicator’s decision was not susceptible to enforcement, and summary judgment was refused.
By way of background, the decision of an adjudicator is temporarily binding. It must be complied with unless and until the dispute is finally determined by legal proceedings, by arbitration (if a contract provides for this or the parties otherwise agree), or by agreement of the parties. Therefore, the ‘winning party’ is entitled to commence court proceedings to enforce an adjudicator's decision if the ‘losing party’ has not complied with this.
Initiating Enforcement Proceedings
Enforcing an adjudicator’s decision will involve utilising a rapid procedure developed by the Technology and Construction Court (the TCC), a specialist branch of the High Court, and a party may either issue a claim for summary judgment under Part 7 of the Civil Procedure Rules (if a monetary judgment is sought) or apply for a declaration under Part 8 of the same rules (where no monetary judgment is sought).
Robust Approach of the TCC
The TCC will often adopt a very robust approach when dealing with enforcement, and ordinarily, the court will uphold an adjudicator's decision by way of summary judgment. Only in rare circumstances will a court interfere with the decision of an adjudicator, and when it comes to challenging an adjudicator’s decision, the losing party’s options are very limited; where there is a decision which is susceptible to enforcement, it would need to be shown that the adjudicator had no jurisdiction to make the decision or that there was a material breach of the rules of natural justice.
However, the recent case of Level 1 Raised Flooring Ltd v JM Construction (SW) Ltd 2023 is now one of those rare examples of summary judgment being refused by the TCC. The court had decided that, in the absence of identification of and reliance upon any contractual power to order payment unconditionally, the adjudicator was, in fact, solely identifying that there was no current entitlement to payment to the claimant from the defendant and no more and no less than this.
There was also no issue requiring the adjudicator’s decision on an “if not now, when?” basis. The court, therefore, held in this case that the adjudicator had not reached a decision that was susceptible to enforcement, and it would be wrong for the court to allow underlying policies of robustness and cash flow to undermine the “inchoate nature” of this particular decision (which the claimant had sought to enforce).
Lessons from the case
Whilst the recent case of Level 1 Raised Flooring Ltd v JM Construction (SW) Ltd 2023 demonstrates how enforcement proceedings may not always be successful, it must be remembered that this is quite a rare example of summary judgment being refused. Challenging an adjudicator's decision is only likely to succeed in limited circumstances, and the TCC is often extremely hesitant to interfere with the adjudicators' decisions.
If you need advice on adjudication, whether it be challenging or enforcing a decision, please get in touch. I can be contacted on 01245 453827 or via email at firstname.lastname@example.org