Reference:  EWHC 356 (TCC), 2021 WL 00664938
Date: Monday 22 February 2021
Judge: His Honour Judge Hodge QC Sitting as a Judge of the High Court
Link: Motacus Constructions Ltd v Paolo Castelli SpA  EWHC 356 (TCC) (22 February 2021) (bailii.org)
Keywords: Adjudicators’ decisions; Disputing the court’s jurisdiction; Enforcement; Exclusive jurisdiction; Interim measures; Jurisdiction clauses; Scheme for Construction Contracts; Summary judgments
This is an application for summary judgment to enforce the decision of an adjudicator which awarded the Claimant, Motacus Constructions Limited (“MCL”) the sum of £454 678.65 (plus VAT and interest). The adjudication took place following the Scheme for Construction Contracts (“the Scheme”). The main ground for Paolo Castelli SpA (“PC”) for resisting the application for summary judgment was because the claim had been brought in breach of a clause of the Contract, which conferred exclusive jurisdiction on the courts of Paris, France. As such, the question, unusually for the Court, was whether an exclusive jurisdiction clause favouring a foreign court prevented the court of England and Wales from considering the application for summary judgment.
By way of background, the original dispute between MCL, acting as a subcontractor, and PC arose about sums due under the supply and installation agreement for works to a London hotel. As set out above, the contract contained an exclusive jurisdiction clause which set out that the governing law was Italian law with jurisdiction reserved to the Courts of Paris. A dispute arose as to sums due under the contract, and MCL issued a notice of adjudication, and both parties participated in the procedure. During the adjudication, PC reserved its position but did not raise any issues of jurisdiction. The adjudicator issued his award for payment of £454,678.65 plus VAT and interest on 15 December 2020. Payment of the award was due to MCL by 22 December 2020 but was not made. MCL, therefore, sought enforcement of the adjudication decision and applied for summary judgment. MCL’s case was that the court should accept jurisdiction and enforce the adjudicator’s decision, notwithstanding the exclusive jurisdiction clause, in light of the provisions in either Article 6 (c) or Article 7 of the 2005 Hague Convention. Under Article 6 (c), MCL submitted that it would be “manifestly contrary to the public policy” enshrined in the Housing Grants, Construction and Regeneration Act 1996. It would be manifestly unjust to refuse to enforce an otherwise enforceable adjudicator’s decision.
As for Article 7, MCL argued that the enforcement can, and should, be treated as an interim measure of protection within the meaning of Article 7 and that the court should accept jurisdiction and enforce the adjudicator’s decision, leaving the parties to litigate the dispute in the courts of Paris. On the other hand, PC submitted that the court did not have jurisdiction to determine the request for summary judgment because it had been brought in breach of the clause conferring exclusive jurisdiction.
The relevant question to the court was whether the enforcement of the alleged breach should occur in England and Wales or France. The answer to this question was that the parties had agreed in clause 19 that all disputes arising out of their contract must be settled by the Courts of Paris, France. What was before the court was not the underlying dispute but whether an interim procedure and remedy had been followed and granted. If the court enforced the decision, the parties were still free to litigate that underlying dispute in the courts of Paris. His Honour Judge Hodge QC, therefore, concluded that adjudication constitutes an interim measure of protection within the meaning of Article 7 and that the reality of the granting of summary judgment in the context of adjudication is “to grant an interim, rather than a final and
conclusive, remedy”.This judgment illustrates yet again the court’s willingness to enforce the “pay now, argue later” principle: even where a foreign court has jurisdiction over the subject matter, the adjudication process, as a means to securing an interim remedy, still has a part to play.