Motacus Constructions Ltd v Paolo Castelli SpA

An exclusive foreign jurisdiction clause does not prevent an English court from enforcing an adjudicator’s decision where the enforcement proceedings fall within the interim-measures exception in article 7 of the 2005 Hague Convention. An adjudicator’s decision under the Housing Grants, Construction and Regeneration Act 1996 and the Scheme is temporarily binding and protects the successful party pending final resolution of the substantive dispute. The article 6(c) exceptions for manifest injustice and public policy are subject to a high threshold. In the absence of evidence that enforcement cannot proceed effectively in the chosen foreign court, those exceptions are not established.

The claimant, a sub-contractor, applied for summary judgment to enforce an adjudicator’s award arising from works at a London hotel. The construction contract was governed by Italian law and gave the courts of Paris exclusive jurisdiction over disputes. The contract did not contain the adjudication provisions required by section 108 of the Housing Grants, Construction and Regeneration Act 1996, so the Scheme provisions operated as implied terms. The defendant argued that article 6 of the 2005 Hague Convention required the English proceedings to be suspended or dismissed. The claimant relied on the article 6(c) exceptions and article 7. The central issues were whether enforcement was manifestly unjust or contrary to public policy, and whether enforcement of the adjudicator’s decision was an interim measure of protection.

1. The application succeeded. Summary judgment was entered for £454,678.65, together with VAT, interest and costs.

2. Sections 108(3), 108(5) and 114(4) of the Housing Grants, Construction and Regeneration Act 1996, together with paragraph 23 of the Scheme, made it an implied term that the adjudicator’s decision was binding until final determination by legal proceedings, arbitration or agreement. The statutory adjudication and payment provisions applied despite the contract being governed by foreign law.

3. Article 6(c) did not permit the English court to retain jurisdiction. The claimant bore the burden of showing manifest injustice or that giving effect to the exclusive jurisdiction clause would be manifestly contrary to United Kingdom public policy. Those exceptions imposed a high threshold. There was no evidence that the award could not be enforced effectively in France. The parties were therefore held to their contractual bargain.

4. Article 7 applied. The categories of interim protective measures were not closed. An adjudicator’s decision was not final and conclusive on the substantive merits, and its enforcement protected the successful party pending final resolution of the dispute. The summary judgment application therefore constituted an interim measure of protection, notwithstanding that summary judgment was itself a final remedy in procedural form.

5. The court was not required to suspend or dismiss the proceedings. The court rejected the article 6(c) argument but accepted the article 7 argument. Payment was ordered by 8 March 2021, with the defendant also ordered to pay the claimant’s summarily assessed costs of £30,000.

First-instance decision of the High Court (Technology and Construction Court). No appellate history was stated in the judgment.