Actavo UK Ltd v Doosan Babcock Ltd

An adjudicator’s decision is binding on an interim basis and will ordinarily be enforced summarily, even where the adjudicator may have made an error of fact or law within jurisdiction. The usual position is pay now and argue later. A defendant may resist immediate enforcement on a short, self-contained issue only where the issue requires no further evidence or elaboration and it would be unconscionable for the court to ignore it. Where successive adjudications produce decisions affecting the same financial position, the court should first consider validity and enforceability, then give effect to both valid and enforceable decisions in a manner appropriate to their bases. A disputed issue requiring evidence should generally be deferred.

Actavo sought summary judgment to enforce an adjudicator’s decision requiring Doosan to pay sums arising from a payment application. The decision included interest and compensation under the Late Payment of Commercial Debts Interest Act 1998.

During the enforcement proceedings, Doosan obtained a second adjudication concerning the final account. That adjudicator determined a substantially lower final value and found that no repayment was due to Doosan. Doosan relied on that decision to reduce the amount enforceable and also challenged its validity, including on the grounds that it was issued late and that no crystallised dispute existed.

The central issues were whether the first decision should be enforced, whether the interest issue could be determined summarily, and how the court should deal with the potentially overlapping second decision.

1. Enforcement of the first adjudication. The first adjudicator’s decision was valid and binding on an interim basis under paragraph 23 of the Scheme for Construction Contracts. Any error concerning the construction of the subcontract or the application of the Late Payment of Commercial Debts Interest Act 1998 would have been an error within jurisdiction and would not ordinarily provide a defence to enforcement.
2. Interest issue. The issue could not properly be determined under the defendant’s Part 8 claim at the enforcement hearing. The alleged previous course of dealing required substantive evidence, and the defendant had relied on the same Late Payment Act arguments in the second adjudication. The defendant therefore failed to satisfy the guidance in Hutton Construction v Wilson Properties Ltd [2017] EWHC 517.
3. Overlapping adjudications. The court applied the approach summarised in HS Works Ltd v Enterprise Manage Services Ltd [2009] EWHC 729. It was necessary to consider whether each decision was valid and enforceable, and, if both were, to give effect to both. The court retained control over the appropriate method of enforcement, particularly where set-off might undermine the basis of the first decision.
4. The validity of the second decision could not be determined summarily. There was a genuine evidential dispute about whether the parties had agreed an extension of time under paragraph 19 of the Scheme. The late issue of an adjudication decision may render it invalid, but the court could not decide whether an extension had been agreed on the evidence available.
5. The challenge based on absence of a crystallised dispute was weak, but it was unnecessary to determine it. The first adjudication was enforced for the full judgment sum, with staged payment pending determination of the Part 8 proceedings concerning the second adjudication.