"Smash And Grab" Adjudication Dismissed By High Court

In Tenderbids Limited t/a Bastion v Electrical Waste Management Limited [2026] IEHC 5, the High Court (Court) rejected that "smash and grab" adjudication applies under the Construction Contracts Act 2013 (Act) and held that referral of a dispute to adjudication on this basis is invalid as it does not constitute a properly founded payment dispute.

Tenderbids 2025 decision

In the earlier notable decision, Tenderbids Limited t/a Bastion v Electrical Waste Management Limited [2025] IEHC 139 (Tenderbids 2025 decision), as discussed by us previously (click here), the Court refused an application to enforce an adjudicator's decision. It found that the adjudication was invalid and the adjudicator lacked jurisdiction, as Tenderbids had not followed the contractually required notice procedures. That decision served as a warning for parties to carefully review notice provisions in contracts to avoid having awards set aside. This was followed by a costs-related judgment in June 2025.

"Smash and grab" adjudication

The English Courts have upheld express provisions under equivalent legislation, entitling a payee, by default, to an adjudicator's decision directing payment in the amount specified in the payment claim notice, as a consequence of the paying party failing to respond to a payment claim notice. This is sometimes referred to as "smash and grab" adjudication.

Tenderbids 2026 decision

This latest decision, is the second application to enforce an adjudicator's decision between the parties. The applicant contractor, Tenderbids, contended that it was entitled, by default, to an adjudicator's decision directing payment in the amount specified in the payment claim notice (€1.4m ex VAT, approximately).

The Court considered three issues:

1. the definition of a "payment dispute" for the purposes of the Act
2. the nature and extent of the arguments which can be put forward in opposition to an application to enforce an adjudicator's decision – this entails consideration of the question of whether a party is entitled to resist enforcement on grounds which can be put forward in opposition to an application to enforce an adjudicator's decision, as the forum of first instance;
3. the payment claim procedure – this involves consideration of the question of what consequences, if any, follow for a paying party if it fails to deliver a response to a payment claim notice. The judgment, reminds us that the English case law cannot simply be "read across" to the Act, and the starting point of statutory interpretation must be the language of the legislation itself. The Court carefully considered its approach to statutory interpretation.

Concept of a payment dispute

The Court assessed the arguments and referred to its previous assessment of the definition in Connaughton v Timber Frame Projects Limited [2025] IEHC 469, on which William Fry advised (click here).

It held that a referring party must either be asserting or resisting a claim to a payment which is expressed or stipulated in the terms of the construction contract (including any terms implied into the construction contract by the Act) or is provided for under the Act. This element is a prerequisite to a valid referral to statutory adjudication.

Response to payment claim notice

The Court noted that it appeared that the claim in adjudication was predicated exclusively on the failure to respond to the payment claim notice. Tenderbids, the contractor, contended that, by virtue of this failure, the employer was precluded from defending the claim on the merits.

Adjudicator's jurisdiction

The Court also highlighted that, when determining an application to enforce an adjudicator's decision, one of the first issues whether the adjudicator had jurisdiction over the underlying dispute.

In this case, the adjudicator's decision recorded that the employer did not dispute Tenderbids interpretation of section 4(3) of the Act. Tenderbids argued that, having conceded this point during adjudication, the employer could not now argue otherwise.

The adjudicator was found to have applied a default decision-making approach, treating the employer's failure to respond to the payment claim notice as determinative of the payment dispute and directing payment of the amount claimed, without considering the underlying merits.

Pay now, argue later principle

The adjudicator erred in law in determining that the employer's failure to deliver a response to the payment claim notice triggered an entitlement, on the part of the contractor, to payment in full for the amount specified in the payment claim notice. The Court determined that this is not the proper interpretation of the Act, which does not provide for such a default direction to pay.

The fact that an adjudicator has erred in law in reaching their decision will not normally result in the Court refusing an application to enforce, as the Act allows a dissatisfied party to pursue arbitral or court proceedings. Nevertheless, the Court retains a discretion to refuse to enforce such a decision, and it was held that the error of law "goes to the very core of the adjudication process and compromises the fairness of same".

However, the Court observed that although the employer successfully resisted enforcement of the adjudicator's decision, it did not succeed on one issue: the definition of a payment dispute. As a result, the Court indicated that, subject to a separate costs hearing, the contractor should be entitled to recover part of the costs of the proceedings from the employer.

Conclusion

The courts have generally been reluctant to overturn adjudicators' decisions that are compliant with the Act. However, in this instance, the Court found that the adjudicator's decision was based upon an error of law and that the Act did not permit direct directions to pay where a party failed to respond to a payment claim notice. This decision emphasises the importance of following the contractual and statutory frameworks when initiating payment disputes.

In this decision, the Court has rejected that "smash and grab" adjudication applies under the Act. All parties to a construction contract within any sector, from energy, renewables and utilities to construction and infrastructure, life sciences and med-tech, and technology, must carefully adhere to the contractual and statutory requirements in considering participation in any statutory adjudication process.

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