Berry Smith LLP have successfully acted for the Claimant in the cross-enforcement of two separate adjudications: Wordsworth Construction Management Ltd -v- Inivos Ltd t/a Health Spaces [2024] EWHC 617 (TCC)

In an unusual move, the Court has ordered that the decisions made in two separate adjudications (arising under the same construction contract) should be set off against the other.

On 25 September 2023, Inivos Ltd t/a Health Spaces (‘Inivos’) were ordered to pay Wordsworth Construction Management Ltd (‘WCM’) the sum of £170,562.69, following WCM’s successful referral to adjudication (‘Adjudication 1’).

Shortly after, on 24 November 2023,  Inivos were successful in their own adjudication against WCM; WCM were ordered to pay Inivos the sum of £197,750.54 (‘Adjudication 2’).

Each party considered that their own decision should be enforced, whilst arguing that the other should be unenforceable; on the face of it, the decision given in each adjudication contradicted the reasoning given in the other.

The Decision

The Judge considered that the first adjudicator had made an error of law when making the decision in Adjudication 1.  The adjudicator had dismissed Inivos’ counterclaims on the basis that Inivos had repudiated the contract.

However, despite this constituting an error in law, it did not go far enough to constitute a breach of natural justice.  As such, the Judge concluded that the decision given in Adjudication 1 was, in fact, enforceable.

The counterclaims referred to in Adjudication 2 were the same as those dismissed in Adjudication 1.   However, the second adjudicator decided that he still had jurisdiction to deal with the issues raised in Adjudication 2.

The Judge noted that, generally, “if the [Adjudication 2] decision is a decision on matters which are the same or substantially the same as those decided by the [Adjudication 1] decision, then the later decision is unenforceable”.  

However, the Judge concluded that Adjudication 2 considered issues that had not been sufficiently decided in Adjudication 1. Namely, Adjudication 1 had considered the termination aspect, but it did not give a decision on the merits or quantum of the induvial breaches of contract.

As such, the Judge opined that the second adjudicator had been right to decide that he did have jurisdiction to deal with Adjudication 2.  As such, the decision given in Adjudication 2 was also enforceable.  The parties therefore agreed to set off each decision against the other.

Conclusion

The case is therefore an important reminder that the Courts will seek to enforce adjudication decisions wherever possible; even in circumstances where the adjudicator is found to have erred on correctly applying the law.

The grounds for challenging an adjudicator’s decision remain limited to evidencing that (1) the adjudicator had no jurisdiction to give a decision, or (2) there was a material breach of the rules of natural justice.

Berry Smith is regularly instructed in enforcing, resisting, or challenging Adjudication awards.  Should you wish to discuss this with our construction team, please do not hesitate to contact us on 029 2034 5511  or at disputeresolution@berrysmith.com