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Recent success in the Technology and Construction Court for Ward Hadaway’s Construction team

Ward Hadaway recently represented contractor, Q.F.S. Scaffolding Limited ("QFS"), in successfully enforcing an adjudicator's decision in the sum of over £3million in a dispute arising out of the Battersea Power Station project.

The team involved  in the case of Battersea Project Phase 2 Development Company Limited v QFS Scaffolding Ltd [2024] EWHC 591 (TCC) was Stephen Radcliffe, Barnaby Rosenthall, Ellie Folger and Sam Slater, along with counsel Marion Smith KC and David Sawtell of 39 Essex Chambers.

The parties were in dispute over whether a final payment notice had become conclusive evidence of the sums due to QFS under clause 1.8.1 of the contract (based on a JCT Design and Build Sub-Contract 2016). QFS issued a Notice of Intention to Refer Adjudication No. 11 on 19 December 2022 (“Adjudication Notice”) for the true value of the Final Sub-Contract Sum. Mace (agents/construction managers for BPS) issued a Final Payment Notice to QFS on 22 December 2022.

Paragraph 1.4.1 of Annex 8 of the Sub-Contract stipulates that a referring party must refer the dispute or difference to the adjudicator within 7 days of the Adjudication Notice. BPS objected to the proposed appointment of the adjudicator on the grounds that the adjudication would breach natural justice given the other ongoing adjudications. QFS agreed to delay service of its Referral Notice to a date not before 13 January 2023. Materially, in offering to extend this time period, QFS (via their agent) also referred to the potential eventuality of an “unforeseen or unforeseeable reason” resulting in delay to QFS serving its Referral Notice beyond 13 January 2023.

On 31 January 2023, in response to an email from QFS’s agent that it would be another “two weeks or so” before submission of the Referral Notice, BPS objected to this on the basis the agreement for the Referral Notice to be served no earlier than 13 January 2023 was a suspensory waiver. BPS subsequently gave QFS notice that this waiver would end on 3 February 2023. QFS rejected this on the basis the agreement reached to extend the period for serving the Referral Notice was contractual, therefore it was not open to BPS to bring the agreement to an end.

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It was BPS’s position that no effective adjudication could be pursued once 13 January 2023 or, in the alternative, 3 February 2023 had passed given no “unforeseen or unforeseeable reason” for those dates being missed had been relied on. BPS therefore contended that QFS had abandoned the adjudication proceedings and subsequently sought a declaration by way of Part 8 proceedings that the Final Payment Notice was conclusive evidence of the sums due.

QFS disputed that it had abandoned proceedings at any stage on the basis negotiations continued with BPS up to 5 May 2023, and it was only when the negotiations failed that a new Notice of Intention to Refer to Adjudication became necessary. QFS subsequently issued proceedings to enforce the adjudicator’s decision.

The question for the Court was therefore whether QFS had in fact abandoned the adjudication proceedings, meaning the saving proviso in clause 1.8.2 was not engaged, rendering the Final Payment Notice conclusive evidence of the sums due.

Mr Alexander Nissen KC concluded that QFS did not abandon the adjudication proceedings therefore there was no conclusion of these proceedings until the adjudicator reached a decision in Adjudication No. 11, thus the saving proviso in clause 1.8.2 was effective.

Material to this decision was that on the date BPS asserted QFS abandoned the proceedings, being 03 February 2023, BPS invited a without prejudice discussion on settling the account before Adjudication No. 11 was embarked upon. In the 4 different emails dated between 17 March and 25 April 2023 that followed, QFS was manifestly clear that Adjudication No. 11 would be pursued unless settlement could be reached. Mr Alexander Nissen KC identified there was no indication QFS was “dragging its heels” in the negotiations or that BPS was dissatisfied with the speed of the negotiations. Mr Alexander Nissen KC also highlighted the commercial context surrounding this dispute: the difference between the parties’ positions was in excess of £40m, a difference that would not be abandoned lightly.

Further, the judgment also contemplates the proper construction of “conclusion” in clause 1.8.2, finding that “conclusion” does not include an adjudication that has become a nullity.

For more specifics about this particular case, click here.

If would like any advice with a similar matter, please get in touch with our expert team of Construction solicitors.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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