Injunction to stop Adjudication: Disputes Struck Out in Court
In the recent case of Marbank Construction Ltd v G & D Brickwork Contractors Ltd,  EWHC 1985 (TCC), I was delighted to successfully act for the Respondent in defeating an application by Marbank for an injunction to prevent G&D from continuing with a series of adjudications against it.
The Court again re-iterated its reluctance to interfere with, or prevent, the adjudication of construction disputes maintaining the long-standing principle that it was not appropriate for the court to interfere in the adjudication process where the adjudication had not been shown to be unreasonable and oppressive.
The background to the application is perhaps fairly unusual, and in this respect, it is worth examining why Marbank may have considered an application for injunctive relief to be appropriate.
Lawyers previously instructed by G&D had raised court proceedings for the recovery of monies due under three separate construction contracts between the parties in 2016. For reasons not explored in this case those proceedings were struck out. On having its claims reviewed by an alternative advisor, G&D was advised that its claims could be adjudicated, and the first in a series of adjudications was commenced against the Marbank. The application for injunctive relief was made after commencement of the second and third adjudications.
Marbank asserted an injunction was required to stop those proceedings pending it commencing a Part 8 claim for declarations as to whether a party could avoid a binding court order by commencing adjudication. In addition, it was argued that the existing and threatened adjudications were unreasonable and oppressive where they concerned materially the same issues that had been subject to the court proceedings that had been struck out.
G&D argued not only that the disputes referred to adjudication not been finally determined by court, but also that the “Construction Act” provided that adjudication could be commenced “at any time”. Further, the adjudications were not unreasonable and oppressive and as result were not unlawful.
The court acknowledged that adjudications which were considered unreasonable and oppressive could be restrained [reference, Senior Courts Act 1981 s.37]. However, in the current case Marbank had failed to show that the adjudications were unreasonable and oppressive.
The points put forward by Marbank were issues which would ordinarily be dealt with at enforcement stage, should such proceedings be commenced, as the argument put forward by Marbank was more relevant as a potential jurisdictional challenge. That being said, the court also commented that the mere fact that a claim had been struck out did not necessarily preclude the claimant from re-litigating [Hall v Ministry of Defence  12 WLUK; Davies v Carillion Energy Services Ltd  EWHC 3206 (QB)].
Finally, and in any event it was not necessary for the injunctions to be granted pending the hearing of any Part 8 Claim. Such a claim could proceed in advance of or in parallel with any ongoing or future adjudications.
On its face, there could theoretically be a basis for a jurisdictional challenge where adjudications proceed after court proceedings have been struck out. But, as the court ruled here, such an argument does provide a sufficient basis that commencing adjudication proceedings in such circumstances is oppressive and unreasonable.
It is clear the court remains of the view that the proper forum for such arguments are at enforcement stage of the adjudication process (should it be necessary) and as such there is a procedure already in place that should deal with this once the adjudications have been determined in the first instance.
It was also found, of course, that a case being struck out cannot necessarily be deemed as a final determination and such arguments should again be heard in the appropriate forum, as they may well be…
Jonathan More, Spencer West LLP