REUTERS | Christian Charisius

Injunctions to stop adjudications; whatever next?

Edwards-Stuart J seems to be making waves in the world of adjudication enforcement since his appointment to the TCC last year. First he severed an adjudicator’s decision, then he appeared to introduce a threshold test into applications to stay enforcement proceedings. Now he has granted an injunction, restraining three companies from pursuing three adjudications that they had started against their former engineer on a project.

Injunctive relief is rare in adjudication

In itself, that is unusual. I’m not aware of many cases where an injunction has been granted. After all, the right to refer a dispute to adjudication exists “at any time” and the courts have consistently held that the parties can have on-going adjudication and court/arbitration proceedings at the same time, refusing to stay those proceedings. I checked Coulson J’s book as well, and he only lists a handful of instances where an injunction application succeeded (ABB Power Construction Ltd v Norwest Holst Engineering Ltd; Workplace Technologies Plc v E Squared Ltd and John Mowlem & Co Plc v Hydra-Tight & Co). In the first two cases, there was no construction contract (the parties’ contract pre-dated the Construction Act 1996 coming into force). In the third, the adjudicator was not validly appointed under the relevant contract provisions. Both are fairly old cases, in the context of adjudication enforcement.

Mentmore Towers v Packman Lucas

Therefore, I’m sure I was not alone when I read the judgment in Mentmore Towers and was surprised to see the engineer’s injunction application was successful. Perhaps it was the facts that persuaded the court that this was one of those rare cases where it was appropriate to restrain the three companies from doing what they were trying to do.

The engineer had a claim for fees against a number of companies. It started three adjudications, which one adjudicator dealt with. He awarded the engineer a total of £420,000 odd. The companies never satisfied the adjudicator’s decisions and ignored the enforcement proceedings and subsequent court orders that the engineer obtained. The companies were based in Jersey, and the poor engineer has had to pursue them for its money there. All that takes time and money, something the engineer is trying to get from the companies.

Meanwhile, back in England, then three companies decided to start adjudications themselves. They had always maintained the engineer had been overpaid and wanted to get some money back. This is where the court came in and the engineer made its injunction application. This brings us back to Edwards-Stuart J.

Edwards-Stuart J decided the companies behaviour was “unreasonable and oppressive”. Akenhead J had said the same, during the earlier court proceedings. Akenhead J had gone further, and held that the companies had acted in “bad faith” because they were knowingly claiming the overpayment was greater than it actually was. Edwards-Stuart J didn’t have to consider that point, since the overpayment claim had been reduced by about 50% in the adjudications before him.

Was the same dispute referred to adjudication more than once?

While the companies’ behaviour was pretty bad, at least bad enough to persuade the judge to grant the injunctions sought, I was a little surprised that the engineer did not argue that the adjudicator did not have jurisdiction to hear the dispute, as it was the same dispute as one previously dealt with in adjudication.

This principle is clearly established and would have enabled the engineer to apply to the court for a declaration under Part 8. It is not clear from the two judgments what the precise nature of the disputes referred were. Perhaps this option wasn’t available to the engineer. However, before parties start rushing off to court for an injunction, they should consider carefully the other options available to them. If (before this decision) we really have had only three successful injunction applications in eleven years, it may be some time before the next successful one.

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