Enforcing an adjudicator’s award

Last summer, in Bresco, the Supreme Court finally resolved the question of whether a company in liquidation could ever refer a dispute to adjudication in the affirmative. Of course commencing the adjudication is one thing. Enforcing it is another.

The Court of Appeal has underlined that by dismissing John Doyle Construction’s appeal against the refusal to grant summary judgment on an adjudicator’s award of £1.2m. This related to a final account dispute regarding landscaping works carried out at the Olympic Park. At first instance, Fraser J identified a number of principles which he said reflected the circumstances where an adjudicator’s decision might be capable of enforcement - that  was most likely where there had been a determination of a final account and where adequate security was then in place to cover the costs of a substantive claim.  On the facts of this case, the security offered (a letter of credit and ATE policy) was inadequate and the Court of Appeal agreed so enforcement refused.

However, what is of more interest, were Coulson LJ’s comments that even with adequate security he would still have refused to grant summary judgment. This was because, in his view, an adjudication can never determine the net balance due between the parties because it is, by its very nature, provisional. That being the case, there will always be a cross-claim or set off because the parties had not agreed the adjudicator would finally decide the net balance. That was unlikely to be something suitable for summary determination.

Those comments may not be binding, but they come from an experienced Lord Justice of Appeal familiar with the landscape of constructions disputes. If he is right, that does raise the question of whether an insolvent company will ever be able to successfully enforce an award, or whether a liquidator would now have the appetite for adjudicating claims where there is still no certainty of enforcement.

John Doyle Construction Ltd v Erith Contractors Ltd [2021] EWCA Civ 1452

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