ISG Construction Ltd v Platform Interior Solutions Ltd

A party dissatisfied with an adjudicator’s decision must ordinarily comply with it and argue the merits later. A Part 8 claim may prevent enforcement only within narrow exceptions: an admitted error, or a short, self-contained issue which arose in the adjudication, requires no oral evidence or elaboration, and whose effect is so clear that it would be unconscionable to ignore it at enforcement.

A challenge requiring valuation evidence falls outside that limited procedure. A party cannot characterise an adjudicator’s approach as beyond rational justification where the adjudicator adopted the approach advanced by both parties.

ISG and Platform were parties to a subcontract terminated by ISG. An adjudicator assessed a sum payable to Platform. Platform then brought separate Part 7 proceedings to enforce the decision, while ISG brought this Part 8 claim seeking declarations that the adjudicator’s decision was wrong and should not be enforced.

The enforcement proceedings had already resulted in summary judgment for Platform. The issue was whether ISG’s proposed contractual challenge fell within the narrow circumstances in which a Part 8 claim could prevent timely enforcement.

1. Declarations refused. The court declined to grant the declarations sought by ISG because the claim did not fall within either of the exceptions identified in Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC).
2. The first exception, an admitted error, did not apply. The second requires a short and self-contained issue which arose in the adjudication, requires no oral evidence or further elaboration beyond a short interlocutory hearing, and is one which it would be unconscionable for the court to ignore on enforcement. The consequences of the issue must also be clear-cut.
3. The contractual point advanced by ISG had not been raised in the adjudication. Further, determining the proper contractual approach would not resolve the dispute without evidence as to the valuation of Platform’s entitlement. That was more than a short point of construction.
4. The adjudicator had applied the valuation approach which both parties had invited her to adopt. ISG therefore could not establish that the adjudicator’s construction was beyond any rational justification on that basis.
5. The court clarified that Hutton Construction Ltd v Wilson Properties (London) Ltd did not remove the proper role of Part 8 in deciding whether a legal principle underlying an adjudicator’s decision was correct. Its concern was the use of Part 8 to prevent timely enforcement. The general principle remained that an adjudicator’s decision is binding and, save in exceptional circumstances, must be complied with while a legal challenge proceeds.
6. ISG was free to consider whether to amend its claim to seek wider contractual declarations. The court did not determine the merits of the proposed contractual construction or the related issue under the subcontract’s binding-effect clause.

The declarations were refused at that stage.