Westgreen Construction Limited v Irina Kiryukhina

Adjudication decisions should be enforced summarily. A court will refuse enforcement only where it is plain that the adjudicator decided a question outside the reference or acted in an obviously unfair manner. Errors of fact, law or procedure are insufficient unless they amount to excess of jurisdiction or a material breach of natural justice.

The scope of a reference is identified by the essential claim and the basis on which it was challenged. Defences and responsive evidence may be considered. A point is not a new case where it was foreshadowed or responds to the opposing case, and a party with an adequate opportunity to answer cannot complain of unfairness.

A stay under the Civil Procedure Rules 1998 requires special circumstances or inability to pay. Prospective contractual reimbursement is insufficient where its conditions have not occurred and there is no insolvency, repayment or dissipation risk.

Westgreen Construction Limited sought summary judgment to enforce an adjudication decision concerning the omission of £650,000 in advance payments from Interim Certificate 25 under a construction contract. The adjudicator awarded £733,062.40 excluding VAT; £83,062.40 had already been paid.

Irina Kiryukhina opposed enforcement, alleging excess of jurisdiction and breaches of natural justice concerning the construction of the advance-payment clause and reliance on earlier interim certificates. She also sought a stay under the Civil Procedure Rules 1998, arguing that the advance payments were imminently repayable. The central issues were whether the adjudicator had decided matters outside the reference, whether the defendant had received a fair opportunity to respond, and whether enforcement should be stayed.

Summary judgment was granted and the application for a stay was refused.

1. Enforcement approach. The court applied the robust approach stated in Carillion v Devonport Royal Dockyard [2005] EWHC 778 (TCC) and Carillion v Devonport Royal Dockyard [2005] EWCA 1358. Enforcement should be refused only in the plain case of excess of jurisdiction or obvious unfairness. Ordinary errors of fact, law or procedure do not suffice.
2. Jurisdiction. The essential claim was for payment of the advance payments because they had been omitted from Interim Certificate 25. The defendant was entitled to rely on contractual construction, the parties’ course of dealing and evidence of contractual intention in defending that claim. Applying the approach in McAlpine PPS Pipeline Systems Joint venture v Transco Plc [2004] EWHC 2030 (TCC) and Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC), those matters were responsive to the referred dispute. The adjudicator therefore acted within jurisdiction.
3. Natural justice. The finding that the omission breached clause 4.7 went further than was necessary, but it did not invalidate the decision. The parties had been invited to address the point, no damages were claimed for the breach, and it did not form part of the formal relief. Reliance on earlier certificates was also foreshadowed in the referral and the defendant had adequate opportunities to respond. There was no material breach of natural justice.
4. Stay. Under Civil Procedure Rules 1998 r 83.7(1), the court considered the principles in Wimbledon Construction Company 2000 Ltd v Vago [2005] EWHC 1086 and Gosvenor London Ltd v Aygun Aluminium UK Ltd [2018] EWCA Civ 2695. There was no insolvency, inability to repay, dissipation risk or other special circumstance. Clause 4.7 required the specified contractual conditions for reimbursement. Common-law termination, practical completion and the second adjudication did not amount to an agreed final account. JPA v Sentosa [2009] EWHC 2312 (TCC) was distinguishable on its facts.
5. Orders. Summary judgment enforced the balance of £650,000, together with VAT, the adjudicator’s fee, interest and continuing interest. The stay was refused and the defendant was ordered to pay costs on the indemnity basis.