Citation:
James Frampton acted for the successful Defendant in (a rare case of) resisting enforcement of an adjudicator’s decision on the basis of a breach of natural justice. His Honour Judge Stephen Davies held that the adjudicator had acted in material breach of natural justice by failing properly to consider the substance of an estoppel defence.
Background
The claimant (“LMND”) sought summary judgment in the sum of just under £238,000 plus interest of £40,000 (and continuing) as awarded by an adjudicator in a decision dated 9 October 2025. This claim arose from a Part 7 adjudication enforcement proceeding against the defendant (“Henry”).
In May 2023, the parties entered into a framework agreement for the provision of subcontract services. Pursuant to that agreement, two subcontract work directions were issued, and works were carried out under those directions. The works were completed in 2024.
Following completion, LMND brought a series of adjudications. In total, there were five adjudications between the parties, including the present one. The first adjudication was decided in favour of LMND, and the sum awarded was paid by Henry without dispute. Two further adjudications followed, in which Henry did not participate, and which involved relatively small sums. A fourth adjudication was subsequently commenced seeking repayments, which LMND agreed to.
The present adjudication was brought to recover payment on a notified sum basis in respect of 15 separate applications. By his decision dated 9 October 2025, the adjudicator awarded LMND just under £238,000 plus interest of £40,000 (and continuing). Henry argued that the decision was unenforceable on the basis of two natural justice grounds.
- Estoppel Defence: The adjudicator determined an estoppel defence raised by Henry on a basis that had not been advanced by either party. In doing so, the adjudicator relied on an authority that had not been cited by either side and did not give the parties an opportunity to make submissions on that authority.
- Failure to Address Defence: The adjudicator failed to consider or decide upon a further defence raised by Henry, namely that a sum of just under £209,000 had already been paid and should have been credited against any liability.
Decision (Stephen Davies J)
The Court dismissed the second complaint. However, the Court accepted the first complaint that there had been a breach of natural justice. In dismissing Henry’s estoppel defence, the adjudicator had relied on an arguments and authority that had not been raised by either party and had introduced these points on his own initiative, without giving the parties an opportunity to make submissions on them.
The Court also found that this breach was material. The adjudicator had recognised that Henry had raised a substantial and substantive defence, and had he determined the estoppel defence in its favour, it would likely have been determinative of the claim.
Accordingly, the Court concluded that the breach of natural justice was sufficient to render the decision unenforceable, and enforcement was refused.
Commentary
This judgment is an important reminder that there are limits to the latitude which the Court will grant adjudicators when considering whether they have acted fairly in determining the dispute.
That said, there were two unusual facts to this case which may explain the result: (1) the Referring Party did not serve a Reply before the Decision was issued, and (2) at the enforcement hearing, the Referring Party conceded that the basis on which the Adjudicator had dismissed the estoppel defence was wrong in law.
You can read the full judgment here.
