Bester Generacion UK Limited (“Bester”) engaged PBS Energo A.S. (“PBS”) to aid with the construction of a biomass energy plant in Wrexham. The contract was terminated due to various reasons and two key disputes were referred to adjudication by the parties. The first adjudication was aimed to determine, who had correctly and properly terminated the contract. The result was that PBS were indeed entitled to put an end to the contract. This in turn triggered counter-guarantees provided by PBS. This appeal was against the decision of Pepperall J dated 17 April 2019 (See previous case note corner for more detail on the TCC decision). 

By way of background, following the result of the first adjudication, PBS sought to quantify and recover the losses arising out of termination. The adjudicator held that Bester should pay PBS £1.7million. The adjudicator also gave no credit to Bester for the undelivered plant since it was a case of waiting for Bester to pay in fill before the plant belongs to them, at which point they are then responsible for collecting and disposing of it as appropriate. 

Following this PBS applied for a summary judgment to enforceon the 19 December 2018. Bester adopted a new approach in the summary judgment proceedings and served evidence claiming that PBS had been fraudulent in the previous adjudication. Bester stated that PBS had claimed to have been holding on to Bester’s plant and said they had not sold on or disposed of these items produced under the contract with Bester. Bester did not provide a defence to the TCC enforcement claim. Instead they relied solely upon witness evidence at the summary judgement hearing. It was only from their skeleton argument and witness evidence that Bester sought to resist enforcement or alternatively be granted a stay of execution. 

Pepperall J dismissed the application for summary judgment. He held that Bester had an arguable case in fraud and thus it was inappropriate to grant summary judgment against Bester. PBS had four grounds of appeal (see paragraph 24-26 of the Court of Appeal Judgment) but permission as only granted against grounds 3 and 4. 

Turning to Ground of Appeal 3- lack of defence filed by Bester- the Court of Appeal rejected this procedural point on account of CPR 24.4(2) which states that a pleaded defence is not necessary. Consequently, there was no requirement for Bester to file a defence and therefore no requirement upon Bester to plead allegations of fraud over and above the witness statement. 

Ground 4 concerned a stay of execution. It has been argued that the Judge should have granted summary judgment and, to the extent the Judge was concerned about the fraud, could have ordered a stay. However, during the Appeal hearing, Counsel for PBS acknowledged that if ground 3 failed, then ground 4 would also fail. Consequently, ground 4 failed and the appeal was dismissed.