Another successful enforcement amid serial adjudications

We are pleased to confirm another successful adjudication enforcement on behalf of a client. An unreported decision handed down on 30 September, Portland Construction Group Limited v. Novo Facades Limited reaffirms the court’s robust approach to adjudication enforcement and provided useful guidance on the relationship between successive adjudications arising from the same project.

Background

The dispute concerned defective cladding works carried out by Novo under a subcontract with Portland on a Travelodge development. The parties became involved in a series of adjudications addressing different aspects of their dispute.

In the first adjudication, the adjudicator considered deductions made by Portland against Novo’s interim application and concluded that the cladding works had not been carried out with reasonable skill and care. However, only a relatively modest deduction was allowed.

A later adjudication considered, amongst other things, whether the defective cladding required replacement and whether Portland had validly terminated Novo’s subcontract. The adjudicator concluded that replacement was required and found in Portland’s favour. Portland subsequently obtained a further award for the costs flowing from Novo’s defective work and the termination of the subcontract.

Enforcement 

Novo refused to pay and resisted enforcement on the basis that the later adjudicator had no jurisdiction to determine the replacement issue because it had already been decided in the earlier adjudication. In essence, Novo argued that the first adjudicator’s treatment of the defects meant that replacement could not later be found to be necessary.

Novo also advanced a natural justice challenge relating to the adjudicator’s treatment of expert and manufacturer’s evidence concerning the cladding defects.

The Court’s decision

The Court rejected Novo’s arguments and enforced the adjudication awards.

A key point was that the earlier adjudication had been concerned with the valuation of an interim payment application, whereas the later adjudication required a determination of different issues, including whether replacement of the cladding was necessary. The Court accepted that the later adjudicator was entitled to conclude that the earlier decision had not finally determined that question, applying the test set out by the Court of Appeal in Sudlows Ltd v. Global Switch Estates 1 Ltd [2023] that it is what is “actually decided” that is relevant, not what has simply been mentioned.

The decision also reflects the courts’ continuing reluctance to revisit an adjudicator’s assessment of whether an earlier adjudication binds them on a particular issue. Provided the adjudicator has engaged with the question and reached a tenable conclusion, the threshold for overturning that decision at the enforcement stage remains high. As such, the court confirmed that the question as to whether it is the same issue that has been decided is primarily for the Adjudicator, who has a degree of latitude to decide this which won’t be reopened by the court unless it is ‘clearly wrong’.

Novo’s natural justice argument was also unsuccessful: the adjudicator decided the dispute that was referred to him and did not go off on a frolic of his own. The threshold for showing a material breach of natural justice to resist enforcement remains high.

Our take-aways

The case is a useful reminder that parties should not assume that every issue touched upon in an earlier adjudication has been conclusively determined for all future disputes. An adjudicator’s decision is binding only in relation to issues that were ‘actually decided’, and different adjudications may arise from the same underlying facts while still constituting different disputes.

While unreported, the decision is another example of the courts’ commitment to the “pay now, argue later” philosophy that underpins adjudication. For parties involved in serial adjudications, the focus should always be on what the earlier adjudicator actually decided, rather than what one party later argues was implicitly determined.