It was only published at the end of last week, so I’m not sure if you’ve had chance to look at Coulson LJ’s judgment in Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd, Cannon Corporate Ltd v Primus Build Ltd.
If not, then you should. It contains some important stuff about liquidation and CVAs, and when it is appropriate (and possible) to adjudicate if the referring party is subject to one of those processes. I’m hardly giving the game away to say that you can’t if the party is in liquidation, but you can if it is subject to a CVA. As ever, it is a bit more complicated than that because, although Coulson LJ decided that the adjudicator has jurisdiction in both cases (to borrow Mr Crangle’s phraseology), it will be “an exercise in futility” if the referring party is in liquidation. This was described as theoretical jurisdiction and led Coulson LJ to conclude that adjudication and the insolvency regimes are incompatible. In his view, the solution to that incompatibility is for a court to grant an injunction to prevent an adjudication from continuing and to prevent the liquidator and, more importantly, the responding party from wasting costs.
It is all very interesting and I’m sure we will see plenty of column inches devoted to these aspects of the judgment. However, I think the waiver points applicable to jurisdictional reservations that are discussed in the Cannon v Primus part of the judgment are of greatest use to parties and those representatives who deal with adjudications on a day to day basis. After all, how often do adjudications involve insolvent parties? I certainly haven’t dealt with one for some time now. By contrast, I see general (and specific) reservations all the time. Therefore, waiver is what I plan to focus on today. Continue reading
