This case has provided some useful guidance on the enforcement of an adjudicator’s decision outside of the jurisdiction defined by the contract. The court heard two interlinked disputes brought by the parties to the contract – a ‘jurisdiction application’ and an ‘enforcement application’.
The respondent employer (M& M Contractors (Europe) Limited) was domiciled in Northern Ireland. It had contracted with a sub-contractor based in England (Flexidig Ltd) for the installation of works in Lincolnshire relating to the installation of underground infrastructure for fibre optic broadband. Following completion of the works, a dispute arose between the parties over alleged defects in the works carried out. The contract contained a Northern Irish governing law and non-exclusive jurisdiction clause. It also contained the right for the parties to refer disputes to adjudication, with any applicable arbitration or litigation proceedings to take place in Northern Ireland.
At the time of this dispute, the parties had already engaged in three adjudications. The first two of these had been enforced in Northern Ireland.
In September 2019, Flexidig submitted an application for payment. M&M paid part of this amount and served a pay less notice with respect to the remainder on the basis that the alleged defects meant that no further money was due. On 29 September Flexidig referred this matter to adjudication.
The adjudicator found that both the application for payment and the pay less notice were valid. However, he also determined that he had the power to order the payment of a sum larger than that quoted in the Respondent’s pay less notice (i.e. zero). He requested that M&M pay the sum of £223,000.
Issues under dispute
The court dealt with two interrelated claims in the same proceedings:
- M&M issued a claim form in Northern Ireland on the grounds that the adjudicator had lacked jurisdiction to grant a positive award. This was challenged by the applicant who issued the instant application.
- Simultaneously Flexidig served proceedings in England for the enforcement of the adjudicator’s decision. M&M argued that Northern Ireland was the most appropriate forum for this hearing and challenged the claim on this basis.
Waksman J ruled that the adjudicator’s decision was enforceable in England and should be upheld. He also found that the adjudicator had had the relevant jurisdiction to order the employer to pay a greater sum than that listed in the pay less notice.
The principal points in his judgment can be summarised under the following headings:
Permission to serve proceedings outside of the jurisdiction
Flexidig had argued that it did not require permission to serve its claim form on the Respondent in Northern Ireland. This was on the grounds that the proceedings did not relate to the same claim as that commenced in Northern Ireland under CPR r.6.32. This argument was discounted by the court as the proceedings in Northern Ireland mirrored the claim commenced in England and the same arguments were used in relation to both claims
The applicant therefore would require permission under CPR r.6.37(3) and (4) to serve out of the jurisdiction
England was the appropriate forum for this dispute
Mr Justice Waksman J found that this requirement was clearly met. The following reasoning was given for this conclusion:
- The contract was performed in England
- M&M had a substantial presence in England together with on-site facilities within the jurisdiction
- There were no differences in law from Northern Ireland
- There was not likely to be a problem in dealing with the claim in England – the claim had already been dealt with by the instant court
“In all those circumstances, to suggest now that England is not the proper place to bring the claim is hopeless in my view. To bring the claim in Northern Ireland, where all the costs and expense of both parties incurred in doing it here, would be absurd” (Waksman J, para. 61)
- It was immaterial that previous adjudications had been enforced in Northern Ireland – the applicant was permitted to act differently in relation to the present adjudication.
As the hearing had already taken place, permission to serve proceedings outside the jurisdiction was therefore retrospectively granted.
Timing of Referral
The court noted that it was the deemed receipt of the notice by the receiving party that was the important factor here. There was no reason to assume that time had begun running on the date of sending the notice before receipt had taken place. Time had therefore begun to run from 22 November when the notice was deemed served.
The adjudicator had jurisdiction to grant positive award
The adjudicator had found that he had the ability under s.111(8) of the Housing Grants, Construction and Regeneration Act 1996 to determine the amount of money that could be withheld and whether a sum more than that stipulated by the pay less notice should be paid by the respondent. The court determined that the adjudicator had not strayed ‘off course’ from the remit of his jurisdiction in coming to this decision and that it had not been necessary to take an overly legalistic approach. The parties had provided sufficient responses on this issue and the adjudicator had enough information to reach a decision. No breach of natural justice had therefore taken place.
Points to Note
This case provides some guidelines for disputes where one party to the contract is domiciled outside the jurisdiction of England and Wales. It illustrates that permission from the court is needed to serve proceedings on parties outside the jurisdiction when the dispute is on substantially the same lines as a dispute raised in that other jurisdiction.
The case also sets out some of the circumstances in which the court is likely to consider it appropriate for England and Wales to be the appropriate jurisdiction for enforcing a dispute.
The judgement has provided more clarity in relation to the powers which an adjudicator has in resolving a dispute. Whilst the finding that the adjudicator was able to determine a positive award was specific to the facts of this case, it seems likely that the courts will not insist on an over-technical approach being taken by the adjudicator on questions of this nature.