In the following case the court had to address whether the court had the power to grant an injunction restraining a party from pursuing a referral to adjudication.
Mentmore Towers & others v Packman Lucas [2010] EWHC 457
The employer appointed an engineer to provide engineering services in relation to three projects between April 2005 and June 2006. Planning difficulties meant that the projects were suspended in December 2007.
The engineer commenced adjudication proceedings on 30 April 2009 for payment of outstanding fees. The adjudicator agreed that the engineer was entitled to the outstanding sums.
The employer refused to pay the sums awarded by the adjudicator and the engineer obtained default judgment - the employer still did not pay.
In October 2009 the employer issued court proceedings seeking a declaration of the amount due to the engineer - the engineer was granted a stay of those proceedings pending compliance by the employer of the adjudicator's decision in accordance with the default judgment.
The employer then issued its own adjudication notice and the engineer responded by seeking a court injunction to restrain the employer from pursuing those adjudication proceedings.
Injunctions: the court's approach
The court emphasised the following points in relation to enforcement:
- the courts have said again and again that the decisions of adjudicators should be strictly enforced unless there has been an excess of jurisdiction or breach of natural justice; and
- this was the "pay now, argue later" approach that underpinned the legislative purpose of the Construction Act.
In this case the employer had persistently refused to comply with the adjudicator's decisions and had put the engineer to considerable trouble and expense in taking steps to enforce the adjudicator's decisions. The engineer was therefore entitled to have the adjudicator's "cash award" paid in cash as that was the purpose of adjudication.
As a result, Mr Justice Edwards-Stuart granted the injunction to restrain the employer from taking any substantive steps in the adjudication proceedings. He regarded the employer's referrals to adjudication as simply another attempt to circumvent the machinery and policy of the Construction Act. It was unreasonable and oppressive for the engineer to be subjected to further adjudication proceedings when the employer had failed to honour the first adjudication decisions and subsequent default judgment. The injunction would remain in place until the employer complied with the previous court orders enforcing the original adjudicator's decisions.
Editors' comments
This case confirms that although there are differences between litigation and adjudication there is no reason why adjudication proceedings which are unreasonable or oppressive should not be similarly restrained by application of the same principles that would apply to a stay of an action brought in the courts by way of litigation.
The court also noted that, in principle, the fact that a particular claim is brought by way of adjudication proceedings rather than by litigation may affect the court's view as to whether or not the proceedings are themselves "unreasonable" or "oppressive" since adjudication is inherently quicker and cheaper than litigation. However, the court would not always consider the pursuit of adjudication proceedings to be less oppressive than litigation proceedings.
View: Mentmore Towers & others v Packman Lucas [2010] EWHC 457
This article was first published in the Norton Rose Construction and infrastructure updater June 2010
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