Citation: [2024] EWHC 1825 (TCC)
A Part 7 claim for the enforcement of an adjudicator’s decision was granted because there was no reason not to do so, and the Defendant’s submission of fraud was not sustainable. The Defendant’s Part 8 claim, which sought a declaration that the Claimant’s company voluntary arrangement (CVA) had already settled any claim advanced against it, was also refused, as the CVA made no mention of any future claims that might be brought against the Defendant.
Background
This case concerned a Part 7 claim for the enforcement of an adjudicator’s decision in which ProMEP was the Claimant and Henry Construction Projects (“Henry”) was the Defendant, and a corresponding Part 8 claim brought by Henry, where the roles were reversed.
Henry had previously entered a contract (incorporating the JCT DBSub/C 2016 form with amendments) where ProMEP was engaged as a subcontractor. After approximately 4 years of working together, the relationship deteriorated and both parties moved to terminate their various contracts. ProMEP subsequently entered a CVA in an attempt to remain solvent.
Henry subsequently proved for 3 debts under the CVA. The CVA supervisors confirmed that these claims were accepted. Following the completion of the CVA, ProMEP commenced an adjudication, alleging that Henry was in repudiatory breach of contract, which ProMEP had accepted as terminating the contract. ProMEP claimed payment for work done and damages for breach. Henry rejected the claim and advanced its own counterclaim. ProMEP argued that this counterclaim had been settled by the CVA.
The adjudicator found in ProMEP’s favour and awarded it £90,000. Henry subsequently issued a Part 8 claim seeking a declaration that the CVA had settled all the claims between the two parties (including all claims ProMEP may have against Henry). ProMEP then issued a Part 7 claim for enforcement of the adjudicator’s decision by summary judgment.
Decision
Part 7 application granted. Part 8 application denied.
The CVA did not settle all of the current and future claims between the parties. The effect of the CVA was to wipe out ProMEP’s debts, allowing it to continue trading and potentially pursue claims in the future. Unless these future claims were specifically included in the CVA, they remained as an asset of the company, and Henry could not argue the CVA settled these debts in the way that an insolvency would.
Henry’s fraud arguments were also rejected. In its submissions, Henry had attempted to argue that ProMEP had fraudulently misrepresented its counsel’s opinion as to the whether the CVA covered the claims, and that presenting a summary of this advice to the adjudicator resulted in the finding in its favour at the adjudication. The Judge held that the summary had not been fraudulent, and even if it was, it was not material, because the advice simply represented a legal argument concerning the point of law upon which the adjudciator had to reach his own decision. Further, because these submissions ought to have been made to the adjudciator during the adjudication, Henry could not now seek to resist enforcement using these arguments.
Representation
Graeme Halkerston (Wilberforce Chambers) and Brenna Conroy (Keating Chambers) for Henry Construction Projects Ltd, instructed by Archor LLP. Rebecca Stubbs KC (Maitland Chambers) and Gideon Shirazi (4 Pump Court) for ProMEP Ltd, instructed by HQ Law Ltd.
The full judgment can be found here.
