Imtech Inviron Ltd v Loppingdale Plant Ltd

Adjudication provisions in a main contract are not incorporated into a subcontract merely because the subcontract incorporates obligations flowing down the contractual chain. Clear language is required, particularly where incorporation would impose a condition precedent to litigation or other restrictive obligations. A construction issue may be decided summarily where no reasonable grounds suggest that further investigation of the factual matrix could affect the result. The adjudication notice defines the scope of the referral. An adjudicator’s decision cannot be challenged at enforcement stage merely because the adjudicator may have made an error within that scope.

Imtech Inviron Ltd applied for summary judgment to enforce an adjudicator’s decision requiring Loppingdale Plant Ltd to pay £643,283.04 in respect of an interim payment application. Loppingdale argued that the adjudicator had not been appointed in accordance with the contractual adjudication provisions and had determined disputes arising under more than one purchase order without consent.

The court considered whether the main contract’s adjudication provisions had been incorporated into the subcontract, whether the issue was suitable for summary determination, and whether the adjudication notice confined the adjudicator to a single dispute.

1. Summary judgment granted. Imtech was entitled to judgment enforcing the adjudicator’s decision. Costs were presumptively payable by Loppingdale on the standard basis.
2. The subcontract incorporated those terms of the Framework Agreement or Task Order with which the subcontractor had to comply so that its own obligations and LPL’s obligations were performed. That did not, without clear language, incorporate the Framework Agreement’s adjudication provisions. Those provisions regulated dispute resolution between different contracting parties and included a condition precedent to court proceedings. The court therefore concluded that the Scheme for Construction Contracts governed the subcontract adjudication.
3. The incorporation issue was suitable for summary judgment. Although caution was required when summarily determining contractual construction, no reasonable grounds had been identified for supposing that further investigation of the factual background could affect the interpretation of the documents. The court applied the approach stated in Khatri v Co-operatieve Centrale Raiffeisen-Boerenleenbank BA [2010] EWCA Civ 397, while noting the warning in Royal Brompton Hospital NHS Trust v Hammond (No. 5) [2001] EWCA Civ 550.
4. The Adjudication Notice defined the scope of the referral. It expressly confined the dispute to LPL’s failure to pay the notified sum due on Application No 6. Even if that application included sums attributable to other purchase orders, the adjudicator had answered the question referred. Any error in doing so was not a jurisdictional defect capable of defeating enforcement.

Not stated in the judgment.