Key Facts
- •FK Construction Limited (FK) sought summary judgment against ISG Retail Limited (ISG) to enforce an adjudication decision awarding FK £1,691,679.94 plus interest and costs.
- •The dispute arose from ISG's failure to pay FK under Application For Payment 16 (AFP 16) for roofing and cladding works on Project Barberry.
- •The adjudicator (Mr. Wood) found ISG's Pay Less Notice invalid and directed payment to FK.
- •ISG resisted enforcement, arguing for a set-off based on other adjudication decisions involving the same parties on Project Barberry and Project Triathlon.
- •Several other adjudication decisions concerning AFPs 13 and 14 (Shawyer and Ribbands decisions) and a gross valuation (Molloy decision) existed for Project Barberry.
- •Three further adjudication decisions (Aeberli, Ribbands (Triathlon), and Jensen decisions) existed for Project Triathlon.
Legal Principles
Courts take a robust approach to adjudication enforcement, refusing only in limited circumstances (e.g., valid jurisdictional or natural justice grounds, or appropriate set-off).
BexHeat Ltd v Essex Services Group Ltd [2022] EWHC 936 (TCC)
Generally, adjudicators' decisions are enforced summarily; set-off is usually not permitted unless there's a contractual right, it logically follows from the adjudicator's decision, or there are two valid and enforceable decisions with reciprocal payments owed.
YCMS Ltd v Grabiner [2009] EWHC 127 (TCC); Thameside Construction Co Ltd v Stevens [2013] EWHC 2071; Interserve Industrial Services Ltd v Cleveland Bridge UK Ltd [2006] EWHC 741 (TCC)
To permit a set-off when two valid adjudication decisions exist, the court must determine validity and enforceability of both, and separate proceedings must be brought for each.
HS Works Ltd v Enterprise Managed Services Ltd [2009] EWHC 729 (TCC); JPA Design and Build Limited v Sentosa (UK) Limited [2009] EWHC 2312 (TCC)
Outcomes
Summary judgment granted to FK for £1,691,679.94 plus interest.
ISG's set-off arguments failed because the Molloy decision's validity was uncertain (FK raised a jurisdictional challenge), and separate proceedings weren't brought for it. The Triathlon decisions also lacked validity and separate proceedings. The court found no basis for a set-off under established precedent.