Adjudicator’s decision for an interim payment not enforced after a company enters CVA

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Indigo Projects London Limited (IPL) entered a CVA on 28 February 2019. The Defendants had the benefit of an adjudication award in the sum of £177,662.72 (the Award), made in January 2019. IPL applied for summary judgment to enforce the Award.

The court dismissed IPL’s application on the basis that the Adjudicator’s decision was not determinative of the value of any particular claim. Further, it made no account of the Defendant’s cross-claims for set-off.  As such, even if the Award had been before IPL entered into the CVA, it would have amounted to a payment on account.

Had the Award been enforced, the monies would not have been applied for sole benefit of the Defendants but rather for the body of creditors generally. This would be a distortion of the process of accounting under the CVA, which expressly required the supervisors to take account of sums claimed and counterclaimed between IPL and each of its creditors. To have enforced the award would have been to the detriment of the Defendants. 

Accepting the decision may be wrong, the Court found that this case could fall within the meaning of CPR 83.7(4)(a) such as to justify staying enforcement of the full amount. 

This case can be distinguished from previously decided cases on the basis that a CVA was entered into after the Adjudicator’s decision had been made. 

Indigo Projects London Limited v Razin and Another [2019] EWHC 1205 (TCC)

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