The recent fertility of adjudication enforcement case law has continued in the past week.
We have seen a useful reminder of the principles for using the Part 8 procedure to prevent adjudication enforcement in TClarke v Bell Build (a very concise judgment which you can read here) and a lesser seen example of non-enforcement of an adjudicator’s award in Morganstone v Birkemp (read here).
Morganstone v Birkemp
This case involved several claims and crossclaims concerning an adjudication award of c.£200k to be paid to Birkemp by Morganstone.
Birkemp’s referral sought payment under an interim payment application and, in doing so, to restrict the adjudicator’s jurisdiction to the deductions relied on in Morganstone’s pay less notice. Morganstone’s response relied on two cross-claims which were not included in the notice.
The adjudicator considered whether the new cross-claims could be raised and decided that they fell outside the scope of the adjudication. HHJ Keyser KC considered that this constituted an erroneously restrictive view of the adjudicator’s jurisdiction and meant that there had been a breach of natural justice. Therefore, the decision was not enforced. The Judge also considered that enforcement would enable a referring party to tactically narrow the scope of an adjudication to exclude potentially relevant defences.
The case is a useful example of where an adjudicator’s decision may not be enforced for failure to consider potentially available defences. The adjudicator must consider all arguments (though not every failure would be a breach of natural justice). This is in keeping with our previously enforced award where the adjudicator considered all potential defences but dismissed them, albeit very tersely (and wrongly).
TClarke v Bell Build
In a Judgment handed down on 29 April 2024, Mr Justice Pepperall explained his reasons for ruling that use of the Part 8 procedure was inappropriate. It is important to note that this claim was not an enforcement claim.
As a reminder, Part 8 claims are appropriate where there is no substantial dispute of fact and are usually heard based only on written evidence and oral submissions.
Part 8 is often used to challenge the jurisdiction of an adjudicator or the validity of his decision where primary facts are not in dispute. However the Court has acknowledged the risk of the Part 8 procedure being used too liberally.
In TClarke, there were numerous factual issues regarding the terms of the contract and their variation which require witness evidence. Therefore the claim could not continue as a Part 8 claim.
It was emphasised that the Court will not review, or hear an appeal of, the adjudicator’s decision. It was also considered that, where there are issues of fact between the parties, it is unlikely that determining the Part 8 claim would finally dispose of the disputes between the parties.
This case is a reminder to be cautious about opposing an adjudication with which you are dissatisfied. From a commercial perspective, transfer to Part 7 is almost certain to be a far more costly and time-intensive means of opposing an award, and set you back in the race towards enforcement / resistance.
Adjudication enforcement continues to generate litigation and going forward it will be important to navigate the enforcement guidance very carefully. If you require assistance in considering adjudication enforcement, please do not hesitate to contact us on 029 2034 5511 or at disputeresolution@berrysmith.com.
Harry Moyle – Senior Associate
Tel – 029 2034 5511
