ISG Retail Ltd v FK Construction Ltd
[2024] EWHC 1713 (TCC)
FK Construction Limited v ISG Retail Limited
5 May 2023
[2023] EWHC 1042 (TCC)
High Court
One company (FK) won a court case to get money owed by another company (ISG). ISG tried to argue it shouldn't pay all the money, referencing other related court cases. The judge said the other cases weren't settled yet, so ISG had to pay the full amount.
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.