Equitix ESI CHP (Wrexham) Ltd v Bester Generacion UK Ltd

For jurisdiction under the Housing Grants (Construction and Regeneration) Act 1996, the court must examine the dispute actually referred to adjudication. It is not enough that the wider contract contemplated excluded operations. Exclusions under section 105(2) are construed narrowly. Preparatory and ancillary arrangements may fall within construction operations under section 105(1)(e), even where they are not physical site works. Separate adjudications are separate processes. A reservation of jurisdiction must therefore be made clearly in each adjudication. The court may enforce an adjudicator’s decision summarily while staying execution in whole or in part where a substantial overpayment may be irrecoverable before the final account is determined.

The claimant engaged the defendant to design and build a biomass-fired energy plant. After terminating the contract, the claimant obtained an adjudicator’s decision requiring payment of more than £9.8 million under an interim account. The claimant sought summary judgment to enforce that decision.

The defendant argued that the contract included operations excluded from the statutory adjudication regime, that the adjudicator therefore lacked jurisdiction, and that a jurisdictional reservation made during an earlier adjudication remained effective. It also sought a stay of execution pending final accounting and related proceedings. The central issues were the scope of the statutory exclusion, the effect of the parties’ ad hoc agreements to adjudicate, and the appropriate execution order.

1. Jurisdiction. The relevant question under sections 104(5), 105(1)(e) and 105(2)(c) of the Housing Grants (Construction and Regeneration) Act 1996 was whether the dispute actually referred to the adjudicator related to excluded operations. The defendant’s focus on the scope of the completed contract was misplaced. No plant, machinery or steelwork had been installed or erected, and the disputed interim payments concerned preparatory work and termination consequences. The adjudicator therefore had jurisdiction.
2. Preparatory arrangements, including bonds and a business plan, were capable of being preparatory or ancillary construction operations. The examples in section 105(1)(e) were not exhaustive. Treating every unlisted preparatory activity as excluded would defeat the statutory scheme.
3. Reservation and waiver. The parties had made separate ad hoc agreements to adjudicate because their contractual adjudication provisions were non-compliant. The reservation in the first adjudication concerned ambush and timetabling, not a general jurisdictional objection. It was resolved in that adjudication and did not carry over to the second. A party wishing to reserve jurisdiction must do so clearly in each successive adjudication. The defendant’s agreement to the adjudicator’s terms for the second adjudication, together with its later correspondence, in any event supported acceptance of jurisdiction.
4. Stay. Summary judgment was entered for £9,805,032.27 plus interest. However, the claimant was an SPV that was likely to be wound up, the interim account could not be challenged before final accounting, and the claimant’s financial disclosure was unsatisfactory. Those circumstances justified a stay. The defendant was ordered to pay £4.5 million immediately, bring a further £1 million into court, and receive a stay for the remaining approximately £4.5 million until further order.