CADR Adjudication

ISG Construction Limited V Platform Interior Solutions Limited

Thursday, 7 May, 2020

[2020] EWHC 1120 (TCC)


Mr Roger Ter Haar QC (sitting as a Deputy High Court Judge)

Key terms:

Adjudicators’ decisions; Declarations; Enforcement; Part 8 claims

This was a Part 8 application by the Claimant (“ISG”) for declarations intended to prevent enforcement of an adjudicator’s decision; namely declarations that (1) the decision of the adjudicator is wrong and “beyond rational justification” in that their assessment of sums due to the Defendant (“Platform”) was inconsistent with the terms of the Sub-Contract, (2) that Platform is not entitled to the sums awarded by the adjudicator, and (3) insofar as the claim determined prior or at the same time as Platform’s application for summary judgment to enforce the decision, Platform is not entitled to judgment.

ISG had engaged Platform to carry out works forming part of its redevelopment of a property in Edinburgh. As a result of alleged repudiation of the Sub-Contract by ISG, Platform purported to rescind the Sub-Contract. ISG contended that Platform’s purported rescission was unlawful and that the Sub-Contract had instead been validly terminated by ISG. The adjudicator agreed, deciding that ISG had validly terminated the Sub-Contract. However, the adjudicator determined that ISG had made a significant saving as a result of the termination and awarded that saving to Platform. Platform issued Part 7 proceedings to enforce the adjudicator’s decision on 31 January 2020. ISG commenced their Part 8 application on 27 February 2020. The TCC directed that the two sets of proceedings should be heard separately. The Part 7 claim was heard first, and Platform obtained judgment enforcing the adjudicator’s decision.

In the Part 8 proceedings, the judge’s attention was drawn to the decision in Hutton Construction Ltd v Wilson Properties (London) Ltd[2017] EWHC 517 (TCC); [2017] BLR 344. In that case, the High Court gave guidance on the practice to be followed where enforcement of an adjudicator’s decision was resisted via a Part 8 claim. The claimant would have to demonstrate that: (i) there was a short and self-contained issue which had arisen in the adjudication and which the defendant continued to contest; (ii) that issue required no oral evidence, or any other elaboration beyond that which was capable of being provided during the interlocutory hearing set aside for the enforcement; and (iii) the issue was one which, on a summary judgment application, it would be unconscionable for the court to ignore. Additionally, the onus will be on the defendant to promptly issue a Part 8 application that clarifies exactly what relief or declarations are sought.

The claim was dismissed because it did not meet the Hutton requirements, for several reasons. Firstly, the issue had not been raised in the adjudication. In the adjudication, the parties had agreed on the approach that the adjudicator should take as to valuation. The problem was that when the adjudicator took that approach, it produced a result which neither party had expected. That was what gave rise to the issues raised in the Part 8 proceedings. Therefore, they were not issues that had been raised in the adjudication. Secondly, the judge held that ISG needed to go further than establishing what the correct approach had been under the Sub-Contract. It needed to go on to show what figure would have been produced by an assessment of Platform’s entitlement and that that would have produced a different result. To do that would go beyond a short point of construction and would require valuation evidence. Finally, the declaration sought by ISG went as far as contending that the adjudicator’s construction of the Sub-Contract had been beyond any rational justification. However, it was impossible for ISG to succeed on that case where the adjudicator had done what they had been asked to do by both parties. Given that ISG could not bring itself within the principles set out in Hutton, the judge held that it would be wrong to grant the declarations sought.

This case demonstrates that it will be difficult to fall under the exceptions set out in Hutton. In particular, it will be key that the issues raised in the Part 8 application are issues that arose in the adjudication.

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