ISG Construction Ltd v Platform Interior Solutions Ltd

[2020] EWHC 1120 (TCC)

We discussed this case last month in Issue 239, where Deputy Judge ter Haar QC granted Platform summary enforcement of an adjudicator’s decision. ISG then sought declarations under Part 8 that the decision of the adjudicator was: “wrong and beyond rational justification in that the adjudicator’s assessment of sums due to Platform was inconsistent with the terms of the Sub-Contract”. The purpose of the declarations was to prevent enforcement of the adjudicator’s decision. 

Platform started the adjudication enforcement case on 31 January 2020; ISG started the Part 8 case on 27 February 2020. On 10 March 2020, the TCC said that there was insufficient time to timetable the Part 8 Claim for hearing together with the enforcement case which raised: “different issues for determination”. Platform’s case was heard on 24 March 2020 and ISG’s on 24 April 2020. 

The Judge accepted that the arguments raised serious issues as to whether the approach adopted by the adjudicator was correct as a matter of construction of the contract between the parties. However he did not hear full argument on the proper approach to the contract and so he did not determine the issue. 

The Judge and the parties looked at the case of Hutton Construction Ltd v Wilson Properties Ltd [2017] EWHC 517 (TCC) which set out the conditions that must be satisfied by a defendant who seeks to resist enforcement proceedings via a Part 8 application. There must be a short and self-contained issue which arose in the adjudication that the defendant continues to contest; the issue must require no oral evidence or any other elaboration beyond that which is capable of being provided during the time allowed for the enforcement hearing (usually about 2-3 hours); and the issue must be one which on a summary judgment application it would be unconscionable for the court to ignore. 

In addition, the onus will be on the defendant to promptly issue a Part 8 application that clarifies exactly what relief/declarations it seeks. The Judge here noted that those principles were applied by Mrs Justice Jefford in Seadown Developments Ltd v SMCC Construction Ltd (unreported, 3 November 2017) who said that: 

“It does not simply follow from the fact that the adjudicator’s decision is wrong that it will not be enforced, save in the sort of particular or exceptional circumstances identified by Coulson J. in Hutton for the very reason that normally the fact that the adjudicator may be wrong does not render his decision unenforceable.”

The Judge here considered whether or not the Part 8 proceedings brought by ISG raised a “short and self-contained issue which arose in the adjudication”. As we mentioned last month, in the enforcement decision, the Judge noted that the parties were agreed on the way in which the adjudicator should approach valuation in the event that she determined that it was ISG, not Platform, that validly terminated the sub-contract. The problem was that the result of that approach produced a result which the Judge suspected neither party had expected. It was this which gave rise to the legal issues raised in the Part 8 proceedings as to the proper approach to the adjudicator’s conclusions about valuation. Therefore ISG were raising in the Part 8 proceedings a point not raised in the adjudication.

An exception to this approach might be if there was an admitted error. There was not. In addition, there was a further issue against the Part 8 process. ISG argued that the adjudicator fell into error in that she did not determine the question of what sum was due to Platform by reference to or in accordance with the particular provisions of the contract, and, in particular, did not assess Platform’s entitlement, if any, on the value of the works up to the date of termination. To make this argument good, ISG needed valuation evidence. It was no longer a short point of construction.

Finally, the declaration as sought by ISG went as far as contending that the adjudicator’s construction of the contract was beyond any rational justification. However, in the Judge’s view, it was impossible for ISG to succeed on that case where the adjudicator had done what she had been asked to do by both ISG and Platform.

Whilst the Judge noted that it might be possible for ISG to seek to apply to amend the Details of Claim in the Claim Form in order to request slightly different declarations, something that might be opposed, for the present purposes, the Judge simply held that:

“to grant the declarations sought with the purpose and effect of preventing enforcement of the Adjudicator’s Decision would be wrong.” 

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