The recent Technology and Construction Court decision in Beck Interiors Ltd v Eros clarified that exceptional circumstances are required to injunct an adjudication from proceeding.
In Beck Interiors Ltd v Eros Ltd, the Technology and Construction Court (TCC) clarified that exceptional circumstances are required for an injunction to prevent an adjudication from proceeding.
Background
In 2020, Eros Ltd (Eros) contracted Beck Interiors Ltd (Beck) as design and build fit-out contractor in the development of The Residence, Mandarin Oriental, in Hanover Square, London.
The parties fell into dispute and became involved in ongoing court proceedings and adjudications.
Eros commenced two adjudications in March 2024, in which there were disagreements over timetabling, particularly the length of time allowed for Beck's responsive submissions. Eros then commenced four adjudications in May 2024, claiming substantial additional payments, and similar timetabling issues arose. In June 2024, Eros' agents wrote to Beck's agents advising a further claim which it intended to pursue at adjudication.
Beck then applied to the court for an injunction against Eros issuing any further notice of adjudication without the court's prior permission and claiming that its four adjudications raised in May 2024 should be immediately withdrawn.
Decision
The court rejected Beck's application. With reference to the Housing Grants, Construction and Regeneration Act 1996, and relevant case law, the following key points were considered:
- a party to a construction contract has the right to refer a dispute arising under the contract to adjudication at any time;
- the court can grant an injunction preventing the pursuit of an adjudication, whether commenced or not, but that power will rarely be exercised;
- the court will rarely interfere in an ongoing adjudication; and
- an injunction restraining the issuance of notices of
adjudication will normally only be granted where:
- the adjudicator would obviously lack jurisdiction, so there could be no purpose in pursuing the adjudication to a decision; or
- it is unreasonable and oppressive to pursue the adjudication, for example where an adjudication is deliberately delayed until shortly before Christmas (unreasonable) and the relevant personnel within the responding party have just been posted abroad (oppressive) – both aspects must be present to a "fairly high degree".
The court reiterated that its ability to police adjudications will be used sparingly, and only in exceptional circumstances. If the adjudicator can deal with the adjudication fairly, then it is for the adjudicator to decide the matter without interference from the courts.
Although four simultaneous adjudications were a burden to Beck, Eros had a right to raise them and Beck had not persuaded the court that Eros' approach was unreasonable or oppressive. Timetabling issues were for the adjudicator and any unfairness could be raised by Beck in defence of enforcement proceedings.
Key takeaway
The core lesson from this case is that the court will only injunct adjudication proceedings if the adjudicator obviously lacks jurisdiction, or if pursuing the adjudication is unreasonable and oppressive to the other party involved.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
