NAP Anglia Ltd v Sun -Land Development Co Ltd

An adjudicator’s decision may be enforced summarily even where the same dispute is being litigated. A challenge based only on alleged errors in the adjudicator’s conclusions is unavailable at enforcement stage. Natural justice may be engaged by failure to consider a substantive defence, but not ordinarily by failure to address every evidential point or submission expressly. A party may refer a dispute to adjudication at any time, but execution may be stayed in special circumstances. The court should balance prompt enforcement against the risk that the successful party will be unable to repay the award. A stay may therefore be partial where repayment of the whole sum is doubtful, but the evidence supports repayment of a substantial part.

NAP sought summary judgment to enforce an adjudicator’s award of £96,334.41 arising from a construction contract and the parties’ final account dispute. The same dispute was already before the Norwich County Court, where a lengthy trial remained incomplete. Sun-Land resisted enforcement, alleging an unfair adjudication timetable and failure to address substantive arguments. It also sought a stay of execution because NAP might be unable to repay the award if unsuccessful in the county court proceedings.

NAP additionally sought recovery of the adjudicator’s fees, subject to a condition that it first pay those fees. The issues were whether natural justice had been denied, whether the conditional fees claim disclosed a cause of action, and whether execution should be stayed.

1. Enforcement. Summary judgment was granted for £96,334.41, subject to interest. The adjudicator’s timetable was fair and reasonable. Giving the referring party the final submission, and allowing one more submission than the responding party, was not inherently unfair, particularly because later exchanges should generally be shorter.
2. The adjudicator had addressed the substantive issues raised. He was not required to set out reasons for rejecting every criticism of evidence or every element of a submission. A failure to consider a substantive defence may breach natural justice, but failure to address a particular evidential aspect will not ordinarily do so. Sun-Land’s complaints were in substance challenges that the adjudicator had reached wrong conclusions. Such challenges cannot resist enforcement, even if the conclusions might later prove wrong in the county court.
3. The adjudicator’s decision could be enforced notwithstanding the concurrent county court proceedings. The statutory right to refer a dispute to adjudication existed at any time. The circumstances were not the exceptional case contemplated in Herschel Engineering Ltd v Breen Property Ltd [2000] BLR 272 in which a stay would ordinarily be appropriate.
4. Under RSC Ord 47, r 1(1)(a), probable inability to repay an adjudication award may constitute special circumstances. The court had to consider both NAP’s ability to repay and whether its present financial position was materially worse than when the contract was made. Sun-Land failed to establish that NAP could repay none of the award, but there was a real risk concerning repayment of approximately £100,000 at short notice. Execution was therefore stayed to the extent that the judgment exceeded £65,000. Sun-Land was ordered to pay £65,000 within 21 days.
5. NAP’s claim for the adjudicator’s £9,855 fees failed. The adjudicator had made recovery conditional on prior payment by NAP, and NAP had no cause of action when it issued the claim form because it had not then paid the fees. Costs were reserved for written submissions.