Construction Adjudication Cases: Part 1 of 2020

Flexidig brought proceedings in England to enforce the award and M&M resisted on a number of grounds. They applied to dismiss Flexidig’s claim altogether on the basis that (a) it had not been served correctly as a matter form, and (b) the court did not have substantive jurisdiction to hear the claim anyway as M&M was domiciled in Northern Ireland and the proceedings should have been brought there. That “Jurisdiction Application” was in its turn contested by Flexidig which, to the extent necessary, sought permission to serve M&M out of the jurisdiction or to dispense with the service altogether. On the substantive issue of enforcement, M&M said the adjudicator had no jurisdiction to decide any sum was due once he found the pay less notice was valid. This had not been a true value adjudication and that was what the adjudicator had wrongly entertained. Further he was in breach of the rules of natural justice in doing so as it was not a matter that could be or had been fully canvassed on the materials before him nor had he given the parties prior indication of his intention to look at awarding a sum between the full amount claimed by Flexidig and the zero sum contended for M&M. Service M&M first contended that the court proceedings had not been properly served on them. The matter fell to be considered under the Civil Jurisdiction and Judgments Act 1982 which governed intra-UK proceedings if it could show that the court had substantive jurisdiction. For those purposes, it was common ground that the English court would have substantive jurisdiction to hear the claim because England was the place of performance of the subcontract.

Flexidig could thus serve the proceedings on M&M without the permission of the court if it could avail itself of CPR 6.32. Otherwise it would need permission from the court to serve out and that is under CPR 6.37. M&M’s objection amounted to this: that there were proceedings extant in Northern Ireland to determine the very question decided by the adjudicator, challenging his award as unlawful, which meant that permission to serve out was necessary and that he English court could and should not assume jurisdiction. After considering all of the circumstances, the court was satisfied that the Northern Ireland proceedings were pending for the purposes of CPR 6.32, such that the gateway for service without permission was not available. The court then considered whether to grant permission to serve out (which could be done retrospectively). Given the stage the English proceedings had reached, the fact that the applicable substantive law was the same in England as Northern Ireland, the adjudication was conducted under the English Scheme, M&M had instructed English Lawyers, that it was in a substantial way of business in England with current contracts here (including the contract in Lincolnshire), and the wasted expenditure if the proceedings were now to be heard in Northern Ireland, the court had little hesitation in granting permission to serve out. M&M also objected to the manner of service by email. The court found that the proceedings had been properly served by post. Had it been necessary the court would have allowed the alternative of service by email.

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