April 18, 2019

Court rules against attempt to block adjudication proceedings

Palmers’ construction law team successfully fought off an attempt to block on-going adjudication proceedings.

The recent case, heard at the Technology and Construction Court (TTC) at London’s High Court of Justice, followed claims that the adjudicator had been incorrectly appointed and therefore had no jurisdiction.

As background to the case, following a construction contract dispute between Billingford Holdings & BFL Trade and SMC Building Solutions1, our client issued a notice of intention to refer the matter to adjudication.

An adjudicator was subsequently nominated by the President of the Royal Institution of Chartered Surveyors (RICS) who then notified both parties of his appointment.

Billingford disagreed with the appointment, claiming that the incorrect nominating body had been used and as a result, they applied for an urgent interim injunction against our clients, SMC Building Solutions Ltd and the adjudicator.

At the TCC, Mr Justice Fraser refused to grant an injunction. Although he agreed that the court could issue injunctions relating to ongoing adjudications and had done so in the past, “such a jurisdiction will be exercised very sparingly”, making it clear that such injunctions were the exception in very rare cases, rather than the general rule.

The judge went on to say that, the particulars of this case were “entirely run of the mill” and were similar to another case (Skymist Holdings Ltd v Grandlane Developments Ltd) where an injunction was similarly declined.

Adam Davis, a Partner with Palmers, explained: “The whole point of going to adjudication is that, for both parties, the process is speedy and keeps costs to a minimum, with adjudicators normally reaching a decision within 28 days.

“In this particular case, the Court made it plain once again that a responding party should not interfere with an on-going adjudication, except in very rare and exceptional circumstances.”

Delivering his ruling, Mr Justice Fraser said: “Adjudication has to be allowed to continue, so far as possible, free from the interference of the court, and quibbles or challenges to an adjudicator’s jurisdiction should, in a conventional case, be taken upon enforcement.“

Adam, continued: “As Mr Justice Fraser correctly points out, the time for such challenges is at the enforcement stage.

“There is no doubt that the time limits in adjudication are extremely short.  It is also clear that, for some disputes, observing those time limits is extremely difficult. However, this is what Parliament has decided needs to happen and the court will not interfere with the timetable and adjudication at all, save to stop it in very rare circumstances.”

1Billingford Holdings Ltd & BFL Trade Ltd v SMC Building Solutions Ltd & Anor [2019] EWHC 711 (TCC) (08 March 2019) [link http://www.bailii.org/ew/cases/EWHC/TCC/2019/711.html ]