Partner Projects Ltd v Corinthian Nominees Ltd

An adjudicator may award interest on sums exceeding those certified where the contract permits the adjudicator to open up, review and revise certificates. The corrected certificate is treated as establishing the sum on which contractual interest is payable. An adjudicator’s error in construing the contract is an error within jurisdiction where the issue was referred, rather than an excess of jurisdiction. Summary judgment enforcing an adjudicator’s award will generally be stayed only where special circumstances justify it. A claimant’s inability to repay is relevant, but the court must consider whether its financial position was caused materially by the defendant’s non-payment and must weigh all the circumstances.

Partner Projects Ltd applied for summary judgment to enforce an adjudicator’s award of approximately £850,000 arising from a building contract with Corinthian Nominees Ltd. Corinthian argued that the adjudicator had exceeded his jurisdiction by awarding interest on sums not certified by the architect and, alternatively, by relying on the Late Payment of Commercial Debts (Interest) Act 1998 when that claim was raised only in reply.

Corinthian also sought a stay of execution because Partner Projects’ financial position might prevent repayment if the award were later reversed. The central issues were whether the adjudicator’s decision was enforceable and whether the evidence established special circumstances justifying a stay.

1. Interest and jurisdiction. The adjudicator had not awarded interest under the Late Payment of Commercial Debts (Interest) Act 1998. He had applied the contractual interest provision and adjusted the rate in accordance with his contractual powers. The objection based on the Act therefore failed.
2. Clause 30.1.1.1 did not itself permit interest on sums which had not been certified. However, clause 41A.5.5.2 empowered the adjudicator to open up, review and revise certificates. He was therefore entitled to substitute the sums which should have been certified and award contractual interest on those corrected sums. This conclusion was supported by the observations in Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2005] EWCA Civ 814.
3. The power to award interest was not freestanding. The contractual power in this case was sufficient, consistently with Carillion Construction v Devonport Royal Dockyard [2006] BLR 15. In any event, the entitlement to interest under clause 30.1.1.1 was expressly within the adjudicator’s terms of reference.
4. Following C&B Scene Concept Design v Isobars [2002] BLR 93 and Bouygues v Dahl Jensen UK Ltd [2000] BLR 49, an erroneous answer to a legal question within the referred dispute is an error within jurisdiction and does not prevent enforcement.
5. Stay of execution. The principles summarised in Wimbledon Construction v Vago [2005] BLR 374 applied. The probable inability to repay may constitute a special circumstance, but it is not decisive. The court must consider the claimant’s position when the contract was made, the extent to which its difficulties resulted from the defendant’s non-payment, and all the surrounding circumstances. JPA Design and Build Ltd v Sentosa (UK) Ltd [2009] EWHC 2312 (TCC) and Pilon Ltd v Breyer Group plc [2010] EWHC 837 (TCC) were fact-sensitive and provided limited assistance.
6. Partner Projects’ financial difficulties were materially caused by Corinthian’s failure to pay. Partner Projects was likely to continue trading and repay a substantial part of the award. Corinthian’s conduct and the policy favouring prompt enforcement also weighed against a stay. Summary judgment was granted for £850,509.53, with interest to be assessed if not agreed, and execution was not stayed. Payment was directed within 28 days, subject to submissions.

First-instance decision. No appellate history is stated in the judgment.