Routes to enforcement
Issue 1. In what circumstances will a company in liquidation be entitled to summary judgment on a valid adjudicator's decision in its favour? After considering the Supreme Court judgment in Bresco, and the court of appeal judgments in Bouygues , and in Bresco itself, Fraser J. set out five principles to be applied when considering whether a company in liquidation would be entitled to summary judgment on a valid adjudicator’s decision in its favour. “ 1. Whether the dispute in respect of which the adjudicator has issued a decision is one in respect of the whole of the parties' financial dealings under the construction contract in question, or simply one element of it. 2. Whether there are mutual dealings between the parties that are outside the construction contract under which the adjudicator has resolved the particular dispute. 3. Whether there are other defences available to the defendant that were not deployed in the adjudication. 4. Whether the liquidator is prepared to offer appropriate undertakings, such as ring-fencing the enforcement proceeds, and/or where there is other security available. 5. Whether there is a real risk that the summary enforcement of an adjudication decision will deprive the paying party of security for its cross-claim.”
Two different routes to potential enforcement had to be considered on the application. First, whether a company in liquidation such as JDC was entitled to summary judgment at all. Second is if it was, whether a stay of execution should be granted. The two routes might lead to the same outcome and would require consideration of some if not all of the same matters. The question of a stay would only arise if JDC succeeded in obtaining summary judgment. The main point was to identify the principles that should be applied by the court when considering an application for summary judgment, given Lord Briggs' dicta in Bresco , and his approval of Chadwick LJ in Bouygues . The first matter to consider is whether the adjudicator’s decision was a valid one, that is to say, made within his/her jurisdiction and without any material breach of the rules of natural justice. Only if any such challenges were resolved in the referring party’s favour, and the decision was found to be valid would it be necessary to go to consider the issues that followed.
The issues for the court
There were three issues to be resolved:
1. In what circumstances will a company in liquidation be entitled to summary judgment on a valid adjudicator's decision in its favour?
2. Were those circumstances present here, such that JDC was entitled to summary judgment?
3. If so, should the court order a stay of execution, as was done in Bouygues v Dahl Jensen , in light of the Supreme Court decision in Bresco and applying the principles in Wimbledon Construction Company 2000 Ltd v Derek Vago [11].
[11] [2005] EWHC 1086 (TCC)
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