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Application for injunction to prohibit an adjudication due to COVID-19 rejected virtually by the TCC

Alex Delin
06/04/2020

Locations

United Kingdom

The Technology and Construction Court's decision is the first indication of its approach coronavirus-related disruption to adjudication timetables.

  The Technology and Construction Court (TCC), has rejected a contractor's application for an injunction to stop an adjudication brought by a homeowner due to the coronavirus (COVID-19) outbreak – in what looks for be the first attempt of this nature.
 
In Millchris Developments Ltd v Waters [2020] 4 WLUK 45, a homeowner commenced an adjudication on 23 March, and an adjudicator handed down directions, including a site visit, to take place.
 
The contractor, which had ceased trading in November 2019, did not consider it could comply with the deadlines of the adjudicator's directions because of the impact of COVID-19 and the restrictions the UK government has put in place, particularly self-isolation measures.
 
Accordingly, the contractor requested that the adjudication be postponed until the lockdown measures have been lifted.
 
The adjudicator rejected those submissions and directed for the adjudication to continue with a two-week extension to the timetable.
 
Aggrieved at the adjudicator's directions, the contractor applied for an injunction to prevent the adjudication from continuing. The contractor argued that:
 
  • It would be a breach of natural justice for the adjudication to continue in circumstances in which it had ceased trading months earlier;
  • It would require time to obtain evidence from the appropriate witnesses (especially given its trading position);
  • That its solicitor was self-isolating, making it difficult to obtain the necessary evidence; and
  • It did not have sufficient time to attend or instruct an independent surveyor to attend the site inspection the adjudicator had directed.
 
The TCC's decision
 
While confirming that the court had the power to prevent an adjudication from continuing, in applying the American Cyanamid guidelines, Mrs Justice Jefford, sitting in the TCC via a virtual hearing in which the respondent was not represented, refused to provide injunctive relief.
 
She said that the contractor had not provided any suitable reason as to why papers could not be scanned to its solicitor, who was working from home, or anyone else.
 
She also said there was no right for a party to attend a site visit in an adjudication, especially when the contactor could provide a list of matters for the adjudicator beforehand.
 
The contractor had also failed to contact its project manager and its difficulty communicating with its former managing director was not a consequence of the outbreak of COVID-19.
In the circumstances, the adjudicator's proposal of a two-week extension to the timetable was sensible and reasonable, because it would allow the contractor sufficient time to counter any repercussions of COVID-19.
 
The decision, handed down on 2 April, appears to be the first on the consequences of COVID-19 on adjudication timetables.
 
As Mrs Justice Jefford noted, it would be unprecedented to prohibit an adjudication because of a pandemic, although there might be circumstances where an injunction may be granted.
 
It remains to be seen whether, notwithstanding the court's rejection of an injunction, any decision resulting from the adjudication will be challenged at enforcement stage.
 
For more information about how construction companies should respond to the disruption caused by COVID-19, this video contains some FAQs, with answers that continue to align with current guidance.
 
If you have any questions or concerns about your projects in light of the coronavirus outbreak, Fieldfisher's construction and projects team would be happy to discuss your specific circumstances with you.
 

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Real Estate
Construction

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Real Estate