In Bexhill Construction Ltd v Kingsmead Homes Ltd [2023], the TCC held that an adjudicator’s decision was enforceable and rejected arguments that the adjudicator had breached the rules of natural justice by not considering all defences raised.

Background

Kingsmead Homes Ltd engaged Bexhill Construction Ltd as its sub-contractor for labour only bricklaying services at a project in Warrington, for a sum of circa £174k.

On 16 May 2022, Bexhill issued its interim application for payment number 8 in the sum of just under £50k. Kingsmead argued its email of 23 May 2022 amounted to a pay less notice for AFP 8 and made clear the Sub-Contract was terminated as of 16 May 2022.

On 18 January 2023, Bexhill referred the dispute to adjudication and asserted that Kingsmead had failed to serve a valid PLN. By a decision dated 15 February 2023, the Adjudicator awarded Bexhill the sum applied for in AFP 8. Although neither party asked the Adjudicator to provide reasons for his Decision, he did so.

After receipt of the Decision, Kingsmead emailed the Adjudicator asserting that the Decision did not “address the content of Kingsmead’s Rejoinder” in which a defence was raised that AFP 8 had not been issued in accordance with the Sub-Contract.

The Adjudicator responded to Kingsmead’s email stating “I confirm that all submissions were reviewed during the Adjudication. Those that have not been expressly referred to in my Decision, did not impact my Decision”.

Following Kingsmead’s failure to comply with the Decision, Bexhill applied for summary judgment to enforce the Decision. On 21 April 2023, Kingsmead served its defence asserting that the Decision was unenforceable for breach of natural justice by the Adjudicator as he had not considered the Defence raised in its Rejoinder.

What did the Court Decide?

The TCC granted summary judgment to enforce the Decision and dismissed Kingsmead’s application for a Stay.

The court found that although the Adjudicator had chosen to provide some reasons for his Decision, even when none were requested, that did not impose an obligation for him to provide reasons and a discussion on every point raised.

Conclusion

To avoid any doubt as to whether an adjudicator has considered all submissions put to them, you should always ask for an adjudicator to submit the reasons for their decision.  Uncertainty can lead to challenges on enforcement, merited or otherwise.

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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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