Those on the losing end of an adjudication often look to a supposed breach of the rules of natural justice in an effort to resist enforcement of the decision. But while it’s not impossible, persuading a court that you did not get a fair hearing from an adjudicator is no easy feat .

The recent case of Essential Living (Greenwich) Limited v Conneely Facades Limited [2024] EWHC 2629 (TCC) serves as a reminder that arguments around natural justice must be considered very carefully.  Failing to persuade the Court that such a challenge has merit could well result in an award of indemnity costs.

What happened?

The case involved a contract for cladding works at Greenwich Creekside. Essential commenced an adjudication against Conneely after discovering defects in the works.

During the adjudication, Conneely requested disclosure of a previous adjudication decision between Essential and another trade contractor. Coneely claimed the materials submitted in the earlier adjudication supported its position that other contractors were responsible for the defects, and Essential was seeking double recovery—an argument it later dropped.

The Adjudicator refused the disclosure request and found in favour of Essential. Not long after, Conneely paid the Adjudicator’s fees without reservation.

Essential then started enforcement proceedings which Conneely resisted on the basis of a breach of natural justice. It argued that in his ruling on the disclosure request, the Adjudicator had made a determination about the strength of Conneely’s case which gave rise to an appearance of bias.

What did the Court decide?

The brevity of the judgment – it runs to seven pages only – is perhaps a reflection of how little merit the court evidently felt there was in Conneely’s natural justice challenge.

In robustly rejecting the challenge, the court held that:

• There was no breach of natural justice. The Adjudicator gave the parties every opportunity to address him, and had not acted unfairly.
• Even if there had been a breach of natural justice (which there had not), it would not have made a material difference to the outcome since Conneely abandoned its double recovery argument.
• By paying the Adjudicator’s fees without reserving its position, Conneely had waived its right to raise a natural justice challenge in any event.

The Judge was quite scathing of Conneely’s conduct, decrying its “unmeritorious” arguments and “wholly inappropriate” attacks on the way the very experienced adjudicator had went about his duties. As a result, Conneely was ordered to pay Essential’s costs on the mor onerous indemnity basis, rather than the standard basis.

What can contractors learn from this?

The threshold for a successful natural justice challenge remains extremely high and parties that double-down by running obviously “unmeritorious” arguments on enforcement risk an award of indemnity costs.

The second warning from the case relates to paying the Adjudicator’s fees. While parties must pay up when ordered to do so, they should nevertheless be astute to reserve any challenge they might wish to maintain in relation to jurisdiction.

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This article contains information of general interest about current legal issues, but does not provide legal advice. It is prepared for the general information of our clients and other interested parties. This article should not be relied upon in any specific situation without appropriate legal advice. If you require legal advice on any of the issues raised in this article, please contact one of our specialist construction lawyers.

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