This was an application by the Claimant (“Balfour Beatty”) for an injunction to restrain three adjudications which the Defendant ("Astec") sought to bring in respect of three separate sub-contracts between the parties. The sub-contracts dealt with various aspects of work to and around Blackfriars Station. Astec had gone into administration and then liquidation, by which point or shortly afterwards both sides had claims or counterclaims against each other. Astec said that it was owed £4m, whilst Balfour Beatty said that it had claims resulting in a net sum of £1m. At the time of the hearing, Astec had sent a notice of adjudication in respect of the first of the three adjudications. Balfour Beatty was seeking an injunction to restrain the adjudication as Astec was in liquidation.

Balfour Beatty argued that the adjudications should not proceed, because they fell outside the limited number of cases where the court will allow adjudications if the company seeking the money is in liquidation. In Bresco v Lonsdale [2019] EWCA Civ 27, the Court of Appeal had concluded that there is no absolute jurisdictional bar to holding an adjudication at the request of an insolvent company. However, Meadowside v 12-18 Hill Street Management [2019] EWHC 2651 determined that it was the exception rather than the rule for an adjudication to proceed in such circumstances. A case is likely to be an exception where the adjudication determines the final net position between the parties under the relevant contract. Satisfactory security must also be provided. Balfour Beatty placed particular reliance on the part of the judgment in Meadowside which stated that "an adjudication, by definition, will not be able to determine the net position between the parties with dealings on more than one contract".

However, the judge pointed out that the judge in Meadowside was not dealing with a case like this, where there was more than one contract but all the contracts could be adjudicated upon in separate but parallel adjudications. If there were three adjudications and each one produced a net result in favour of one or other of the parties, then by netting those results off against each other one would arrive at a complete and comprehensive account of the parties’ mutual dealings. Accordingly, the judge did not take the view that the existing case law debars the taking place of adjudications simply because there will be more than one adjudication because there is more than one contract. 

The judge found no fatal jurisdictional objection to the adjudications proceeding, so was not prepared to grant the injunction. It was held that Astec should be allowed to bring the adjudications on set conditions, and provided that there is sufficient security. In particular, the parties must ensure that the same adjudicator is appointed to deal with all three adjudications together, or they may confer jurisdiction on an adjudicator to deal with all three contractual disputes in one adjudication. Further, once the adjudication decision(s) have been given, there must be a stay on enforcement against Astec for a period of six months, during which Balfour Beatty may bring litigation proceedings.

This case demonstrates that an insolvent party may be able to pursue more than one adjudication if the effect of the adjudications is to determine the final net position between the parties. This may be due to the works being split across several contracts. Such a case will fall within the exception to the rule that an insolvent party is not normally permitted to pursue an adjudication.

Importantly, Bresco v Lonsdale has been appealed to the Supreme Court so this may have an impact on adjudications where one party is insolvent. We await the judgment.