NAP Anglia Ltd v Sun-Land Development Co Ltd

Case reference: 
[2011] EWHC 2846 (TCC)
Thursday, 3 November 2011

Key terms: 
Court proceedings – Natural Justice – Stay – Insolvency – Timetable – Failure to Consider Issues

NAP agreed to construct 4 houses pursuant to a contract incorporating the CIOB Building Contract. The Contract Administrator issued an interim certificate that was not paid by Sun-Land. NAP purported to terminate the contract for non-payment. NAP started court proceedings in autumn 2008 which did not proceed quickly. In June 2011 NAP referred the dispute to adjudication. The Adjudicator decided in NAP’s favour. Sun-Land resisted the enforcement application on the basis that the timetable for the adjudication unfairly and unjustifiably favoured NAP and therefore constituted a breach of the rules of natural justice. Further the Adjudicator ignored several substantial arguments raised by Sun-Land. The Judge rejected Sun-Land’s arguments. The timetable was not unreasonable on its face and there was nothing unusual about giving the referring party the last word, or in having an odd number of submissions. Further, the relevant question for the Court was whether of not the Adjudicator had answered the question that was referred to him: it was clear that he had done so. Many of Sun-Land’s arguments amounted to allegations that the Adjudicator had wrongly rejected its submissions. There was a fundamental difference between a failure to consider and address a substantive defence put forward by a responding party and a failure to address some particular aspect of the evidence or element of that party’s submissions. Although a party may refer a dispute to adjudication ‘at any time’, there were absurd situations where this right may be limited. However, this was not such a case: there had been no adverse indications by the Judge in the County Court proceedings and that judgment was at least 4 months away. However, it was established that NAP was in a less healthy financial position than when the contract was entered into. But NAP’s present position was not so bad that it would be unable to repay at least a significant proportion of the sum awarded by the Adjudicator. Therefore, a stay of execution was granted in relation to part of the judgment sum only.

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