Niken Construction Ltd v Trigram Carver Street Ltd

Case reference: 
[2016] EWHC 2232 (TCC)
Thursday, 1 September 2016

Key terms: 
Adjudication – Consolidation of disputes – Avoidance of Adjudicator's Decision

The defendant, Trigram Carver Street Ltd entered into on a JCT design and build contract 2011 with the claimant, Niken Construction Ltd, to construct a development of residential apartments for a total price of £2.267 million.

The claimant commenced the first adjudication and was awarded the unpaid balance due under the interim application. The defendant commenced the second adjudication in which the adjudicator decided that its termination was not lawful. The claimant then commenced the third and final adjudication in respect of the sum said to be due as a result of its termination account.

The claimant applied to enforce that decision by summary judgment. The defendant resisted the application, issued its own proceedings to determine the underlying contractual disputes between the parties and sought consolidation.

HHJ David Grant held that “the decision of the adjudicator in the third adjudication is a valid decision, and that the defendant has not established any matter which goes either to jurisdiction or to natural justice, and/or which amounts to a good or sufficient reason not to enforce that decision by way of summary judgment”.

Firstly, in reaching this decision the judge held that having the matters in issue finally determined, whether by litigation, arbitration or any other appropriate form of dispute resolution is not of itself a good reason why a valid decision of an adjudicator should not be enforced.

Secondly, the defendant argued that the adjudicator’s second and third decisions were wrong but it was clearly established that the fact that an adjudicator was wrong was not a reason for his decision not to be enforced following Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWHC 778 (TCC). The defendant's submissions did not go to matters of natural justice.

Thirdly, the fact that the underlying issues between the parties were complex and substantial was not of itself a good reason not to enforce a valid decision of an adjudicator by way of summary judgment.

Fourthly, there was no point in consolidating the proceedings as the claimant's action concerned only its application to enforce the adjudicator's decision. The consolidation application appeared to be a “device sought to be set up in order to avoid the consequences of the adjudicator having made a valid decision”.

This case illustrates a practical difficulty of persuading a court to resist enforcement of an adjudicator’s decision. While a party has a right to have its dispute finally determined at trial, the adjudicator’s decision should be complied with in the interim until the final determination has been obtained which is in line with the “pay now, argue later” principle. This decision also provides indication that an application to consolidate enforcement proceedings with a main action as a way of avoiding enforcement of the adjudicator's decision will not be successful.

Key contact

Tel: +44 (0)20 7421 1986
Tel: +44 (0)20 7421 1986