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Another unsuccessful challenge to an adjudicator’s decision

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Summary: In RMC Building & Civil Engineering Limited v UK Construction Limited [2016], the claimant subcontractor, RMC, sought summary judgment of an adjudicator’s decision. The defendant contractor, UK Construction, sought to resist summary judgment on a number of grounds and in the alternative sought a stay or partial stay of the amount of the award.

The judge found against the defendant in relation to its five challenges to the adjudicator’s jurisdiction, at least one of which he held to be “wholly unsustainable”. It followed that judgment must be given for the claimant.

UK Construction also had no luck with its application for a stay or partial stay of the judgment sum.  It had argued that a failure to stay the amount of the award would lead to manifest injustice, following Galliford Try v Estura [2015], and that in any event RMC could be compensated for a stay by being paid interest on the judgment sum at a later date.

The judge refused to grant a stay or partial stay.  He dismissed the point about RMC being compensated by interest, pointing out that the whole point of the HGCRA was to maintain cashflow in the industry, and that interest was often no compensation for lack of cashflow.

He said that in order to show a risk of manifest injustice, the defendant would need to show either that it would suffer severe financial hardship if required to pay the full amount, or that there was a real risk it may be unable to recover the amount of any payment.  In this case, the defendant had not put forward any credible evidence as to its own financial position. The judge noted that the case of Galliford Try v Estura had been exceptional, and that cases where a stay or partial stay would be granted would be extremely rare.  This was not such a case. 

Conclusion

Whilst this case does not make any new law, it does make it clear to parties seeking a stay or partial stay that such an order will only be granted in exceptional circumstances, and that any such request must be supported by credible evidence as to the defendant’s financial position. 

 

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