Gosvenor London Ltd v Aygun Aluminium UK Ltd

The court granted summary judgment to the claimant to enforce an adjudicator's decision for £553,958.47 plus Value Added Tax, but nonetheless ordered a stay of execution. The judgment restates that adjudicators' decisions are ordinarily enforceable notwithstanding errors of law or fact and that allegations of fraud will only defeat enforcement if supported by clear and unambiguous evidence and, generally, if they could not reasonably have been raised in the adjudication.

The court applied and approved the authorities on fraud in adjudication enforcement (notably SG South, GPS Marine and Speymill) and explained the distinction between fraud that directly affects the subject matter of an adjudicator's decision and fraud that is independent of it. The decision formulates and applies an additional stay principle to Wimbledon v Vago: a stay may be justified where there is a real risk that the claimant will organise its financial affairs to dissipate the adjudication sum so that any later judgment could not be satisfied.

The court refused to admit late evidence served after the draft judgment, criticised the failure of the claimant to serve timely rebuttal evidence at the hearing, and found the claimant's statutory accounts and explanations to be unsatisfactory and indicative of a real risk of dissipation.

Background and factual matrix: The parties contracted for cladding works at the Ocean Village Hotel. Gosvenor, a secondary sub-contractor, obtained an adjudicator's decision in its favour for outstanding labour costs. Gosvenor sought summary judgment to enforce the adjudicator's decision. Aygun defended on grounds of alleged fraudulent invoicing and sought, in the alternative, a stay of execution.

Nature of the applications: (i) Gosvenor applied for summary judgment enforcing the adjudicator's award; (ii) Aygun resisted on grounds of fraud and sought a stay of execution of any judgment in the event judgment were granted.

Issues framed: Whether the fraud allegations were sufficient to resist summary enforcement; whether those allegations could and should have been raised in the adjudication; whether special circumstances justified a stay under CPR Part 83.7(4), including whether there was a real risk the claimant would dissipate funds to avoid repayment.

Evidence and procedure: Aygun pleaded extensive fraud allegations and served witness statements alleging large discrepancies between invoiced labour and actual work, removal of site records by a project manager, attempted bribery, and later intimidation of a witness. Gosvenor served no substantive witness evidence in response before the hearing and sought to adduce fresh evidence only after a draft judgment was circulated.

Court’s reasoning: The court reaffirmed that adjudicators' decisions are enforceable despite errors of law or fact, and that fraud may be a defence but must be supported by clear and unambiguous evidence. Many of Aygun's allegations could and should have been raised during the adjudication timetable and were therefore not a proper basis to resist enforcement. The court nevertheless found special circumstances for a stay: Gosvenor's statutory accounts contained materially inconsistent figures and the explanation was unsatisfactory, giving rise to an inevitable inference of real risk that adjudication monies would be dissipated. The judge therefore refined the Wimbledon v Vago principles by adding a narrowly framed principle that a stay may be appropriate where there is evidence of a real risk the claimant will organise its affairs to dissipate the adjudication sum, with a high evidential threshold comparable to that required for a freezing order. The court also refused to reopen the hearing to admit late evidence after circulation of the draft judgment, save to correct a minor factual date error.

Outcome: Summary judgment for Gosvenor on the adjudicator's decision was granted; a stay of execution of that judgment was ordered because special circumstances existed, principally the risk of dissipation and unsatisfactory accounts.

The court granted summary judgment enforcing the adjudicator's decision but ordered a stay of execution. Rationale: adjudicator decisions are ordinarily enforceable and fraud will only defeat enforcement if supported by clear, unambiguous evidence, which in most respects Aygun had failed to adduce in the adjudication; however, exceptional 'special circumstances' justified a stay because Gosvenor's statutory accounts were materially inconsistent, explanations were unsatisfactory and there was a real risk of deliberate dissipation of the adjudication sum. The court refined Wimbledon v Vago by adding a principle permitting a stay where there is evidence of real risk that the claimant will arrange its affairs to render a future judgment unsatisfied.