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Adjudication Round-Up

  • United Kingdom
  • Construction and engineering - Foundations

06-06-2018

There are two recent cases of note regarding adjudication enforcement:

  1. Gosvenor London Limited v Aygun Aluminium UK Limited [2018] EWHC 227 (TCC) (“Gosvenor v Aygun”) http://www.bailii.org/ew/cases/EWHC/TCC/2018/227.html
  2. Dacy Building Services Limited v IDM Properties LLP [2018] EWHC 178 (TCC) (“Dacy v IDM”) http://www.bailii.org/ew/cases/EWHC/TCC/2018/178.html

Gosvenor v Aygun

The decision in Gosvenor v Aygun is noteworthy because a further principle was added to those set out in Wimbledon Construction Company 2000 Ltd v Derek Vago [2005] EWHC 1086 (TCC) (“Wimbledon v Vago”), that is, the principles to be considered when a stay of execution is sought in adjudication enforcement proceedings.

The further principle was:

“If the evidence demonstrates that there is a real risk that any judgment would go unsatisfied by reason of the claimant organising its financial affairs with the purpose of dissipating or disposing of the adjudication sum so that it would not be available to be repaid, then this would also justify the grant of a stay.”

Whilst the judge anticipated that recourse to the new principle would be uncommon, and that in the majority of cases the existing principles in Wimbledon v Vago would be sufficient, the court’s decision in this case will provide a legitimate basis under which respondents to adjudication proceedings may raise enquiries of applicants seeking to enforce adjudication decisions on:

  • their financial position;
  • how they intend to satisfy any judgments made against them; and
  • how they intend to deal with their assets.

The extent to which applicants will be required to engage in such discussions and the impact of this in terms of time and cost remain to be seen. The new principle has already been sought to be relied on in the case of PBS Energo AS v Bester Generacion UK Ltd (TCC, 13 April 2018), although the defendant was unsuccessful in evidencing any good grounds relating to the claimant’s financial position that would justify a stay of execution.

Dacy v IDM

The decision in Dacy v IDM is of note because it illustrates that, in rare cases, the courts will stray away from their general approach of enforcing adjudicators’ decisions summarily and a trial of issues will be justified.

Dacy had previously applied for summary judgment to enforce an adjudicator’s decision in its favour and the court dismissed the application because it found that IDM had a realistic prospect of succeeding in its defence that an oral contract did not exist. The court therefore held that it could not resolve the dispute on a summary basis and in these proceedings, the court was required to determine, as a preliminary issue, whether a contract existed between Dacy and IDM.

The judge upheld the adjudicator’s decision and found that Dacy and IDM had in fact entered into an oral contract.

The judge emphasised that the court’s general approach is to enforce adjudicators’ decisions through summary judgment and that this decision should not encourage parties in adjudication enforcement applications to contend that a trial is required to determine issues relevant to the enforcement.

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