2) Insolvency - Whether adjudications would determine final net position: Balfour Beatty Civil Engineering Ltd v Astec Projects Ltd (In Liquidation)[8] The court of appeal had established in Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd[9] that, it would be "an exercise in futility" to allow an adjudication to continue when a referring company was in insolvent liquidation, unless there were certain exceptional circumstances. In Meadowside Building Developments Ltd (In Liquidation) v 12-18 Hill Street Management Co Ltd [10] Adam Constable QC set down the factors that required to be satisfied in order to allow an adjudication to proceed. In this case Astec, was a company in insolvent liquidation and commenced an adjudication against Balfour in respect of one of three contracts between them. They intended, if allowed, to commence adjudication proceedings under the other two contracts. Balfour sought an injunction to restrain the adjudication from proceedings on the basis that the ‘Meadowside’ requirements were not fulfilled. The court considered whether a "final net position" could be reached where there were three adjudications under three separate contracts. Waksman J. concluded there was nothing in Bresco or Meadowside that prevented this. The three adjudications would deal with the entirety of the parties' mutual dealings and thus mirror the requirements of rule 14.25 of the Insolvency (England and Wales) Rules 2016 (SI 2016/1024).
Astec had been in liquidation since October 2014 and was legally funded. It also had legal expenses and after the event insurances. The question then was whether the security that Astec was offering was sufficient.
The adjudication was allowed to continue on the following conditions.
1. That Astec provide security for costs in the sum of £750,000 (three times more than the sum initially offered). 2. Astec were to commence the remaining two adjudications within 21 days and the same adjudicator was to be appointed to deal with all three sets of proceedings. 3. The adjudications were to be dealt with together over an 84-day period (thus allowing 28 days for each one), unless the parties agreed to confer jurisdiction on an adjudicator to deal with all three contracts in one adjudication. 4. Balfour was to have 6 months from the adjudicator's decision(s) to issue court proceedings to seek a different result and Astec could not seek enforcement of any decision(s) in its favour during that period or while any subsequent litigation to determine the final position was ongoing.
[8] [2020] EWHC 796 (TCC) (27 February 2020) (Waksman J). [9] [2019] EWCA Civ 27 Coulson LJ [10] [2019] EWHC 2651 (TCC)
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