Application to enforce an adjudicator’s decision failed

Published 31 marzo 2022

The recent decision in Cubex (UK) Limited v Balfour Beatty Group Limited [2021] EWHC 3445 (TCC) is an example of when the Court will refuse to enforce an Adjudicator’s Award. A key factor in this decision was the type of works being carried out and whether these were in fact “construction operations”.

Facts

In around September 2021 Cubex (UK) Limited (Cubex) made an application for summary judgement to enforce an adjudication award of approximately £400,000 plus interest. In the adjudication, Cubex had contended – and the adjudicator agreed – that Balfour Beatty Group Limited (BB), by contracting with a third party for the design and supply of doors for use in fit-out works at Woolwich Station, had committed a repudiatory breach of the contract it had concluded with Cubex.

BB raised the following defences to summary judgment:

1. It had real prospects of showing that:

a. The contract(s) related in whole or in part to “excluded operations” under the Construction Act, so the adjudicator had no jurisdiction over the dispute; and/or 

b. Cubex purported to refer / the adjudicator purported to decide more than one dispute and/or the single contract contended for by Cubex never came into existence, so the adjudicator had no jurisdiction; and/or

c. By deciding the critically important issue of contract formation on a basis which neither party had advanced / been able to make submissions in relation to or put forward evidence on, the adjudicator acted in breach of the principles of natural justice; and

2. Cubex’s delay (of approximately three years) in bringing proceedings was a “compelling reason” for refusing summary judgment.

Decision

The judge refused Cubex’s application for three main reasons, namely:

1. The alleged contract did not relate to “construction operations” under the Construction Act; whilst it did encompass design, such design related to the supply of doors (an “excluded operation” under section 105(2) of the Construction Act) and not to “construction operations”, as required by the Act.

2. The contract found by the adjudicator never came into existence and so he was not properly appointed under a contract about which there could be no dispute.

3. The adjudicator had failed to draw his contract analysis to the parties’ attention, which was sufficient to constitute a material breach of the rules of natural justice e.g. to ensure that each party is fully appraised of any arguments against it (whether raised by its opponent or the adjudicator) and is given a reasonable opportunity to comment. By the decision not reflecting arguments advanced by either party, the adjudicator had arguably gone off “on a frolic of his own”.

The delay in bringing proceedings was not considered a compelling reason to refuse the application; there is no obligation to make an application on any specific date within the relevant limitation period and the lateness did not give rise to any abuse of process.

Key points

• The judgment provides a useful recap of some of the law relating to “construction operations”, “excluded operations” and highlights the unenforceability of decisions relating to hybrid contracts (where the subject matter of the agreement in question relates to both “construction” and “excluded” operations).
• Whilst it is perhaps unusual for a party who successfully adjudicates to delay enforcing an award, the judgment confirms that provided an application is brought within the requisite limitation period, any delay in making it should not be a factor in whether or not it is granted.