Key takeaways
Robust stance to enforcement
Courts will generally enforce adjudication decisions unless there is a material breach of natural justice or jurisdictional issue.
Canvass the issues
Adjudicators must provide a fair opportunity to the parties to comment before departing from their submissions.
Reasons for decisions
The reasoning given by an adjudicator is vital in understanding how they have arrived at any decisions as to law or fact.
In the recent case of Premier Modular Ltd v Maidstone And Tunbridge Wells NHS Trust [2026] EWHC 1404 (TCC), the court grappled with issues of natural justice.
The facts
Premier Modular Limited (PML) and Maidstone and Tunbridge Wells NHS Trust (the Trust) entered into a contract for the design and construction of a new barn theatre at Maidstone Hospital. The contract was based on an NEC4 Option A (Priced contract with activity schedule).
During the works, PML asserted that it required a permanent mains water supply to be made available by 30 October 2023, for the testing and commissioning of elements of its work.
PML alleged that the Trust failed to make the water supply available until 20 February 2024, which caused a 14-week delay to PML’s works.
The adjudication
PML commenced adjudication proceedings against the Trust. Amongst other things, PML sought a decision from the Adjudicator that the failure of the Trust to provide the water supply in time constituted a Compensation Event under clauses 60.1(1), (14) and (18).
In the Referral, PML asserted that the ‘Accepted Programme’ – a defined term in the NEC contract - was the version at Appendix C to the contract (the Contract Programme) unless superseded by any revision to it.
PML relied upon a Revised Programme issued in October 2023 (the “Revised Programme) and sought that the Adjudicator assess the delay by reference to the Revised Programme.
The Contract Programme contained no obligation on the Trust to make permanent water available by a particular date, however various subsequent Revised Programmes issued by PML (but not accepted by the Project Manager) did place such an obligation on the Trust.
The Trust’s position was that it was responsible for the mains water supply, but that there was no requirement in the Contract Programme for it to be made available by any particular date. It contended that there was no Compensation Event under clauses 60.1(1), (14) and (18), and, even if a Compensation Event under clauses 60.1(14) or (18) arose, PML had not notified in accordance with the contract and its claim was therefore time barred.
The Adjudicator subsequently sought certain clarifications from the parties.
With reference to Compensation Event 60.1(3) (The Client does not provide something which it is to provide by the date shown in the Accepted Programme), the Adjudicator asked, ‘Is the Revised Programme Contract Programme Rev2 dated 14 July 2023 an Accepted Programme?’.
Both parties responded in terms that the only ‘Accepted Programme’ was the Contract Programme, which had not been superseded. It should also be noted that PML did not contend in the referral that a Compensation Event under clause 60.1(3) had arose.
In his decision, the Adjudicator decided that the Revised Programme, which required the Trust to provide the water supply by 30 October 2023, was the Accepted Programme, notwithstanding the Revised Programme had not been accepted by the Project Manager in accordance with the contract.
He decided that the Trust’s failure to provide the water supply by the date stated in the Revised Programme, constituted a Compensation Event under clause 60.1(3). He also decided that there was no time bar to PML’s claims.
The Adjudicator awarded PML the sum of £1,655,385.49. The Trust failed to pay the sum to PML, and PML commenced adjudication enforcement proceedings.
The issues
The Trust contended that the Adjudicator’s decision was reached in breach of the rules of natural justice. Three grounds were relied upon:
Ground one
The Adjudicator's central finding that there had been a Compensation Event was made on a contractual basis that had not been raised by the parties and on which neither party had made submissions.
Ground two
The Adjudicator failed to address one of the Trust's defences to the Compensation Event claim, namely that PML had failed to comply with a condition precedent (timely notification) and as such was not entitled to a Compensation Event.
Ground three
The Adjudicator made a finding that the Accepted Programme had been updated. This was not part of the adjudication and, moreover, was entirely contrary to the clear position of both parties in the adjudication that the Accepted Programme had not been updated.
The judgment
Grounds one and three
The court concluded that the Adjudicator had decided the case on a basis which had not been put forward by either party and without giving the parties an opportunity to comment.
Specifically, the Adjudicator decided that a Compensation Event under clause 60.1(3) had arisen, which was not asserted by PML.
Whilst the Adjudicator’s request for clarification referred to said clause, the Court noted that the Adjudicator did not ask the parties, ‘to consider whether clause 60.1(3) was in play’.
Further, the Adjudicator’s request, despite referencing clause 60.1(3), asked the parties instead to clarify whether the Revised Programme was the Accepted Programme. The Adjudicator decided that in his view, it was the Accepted Programme, despite both parties alleging that the Accepted Programme was the Contract Programme. As above, the Contract Programme did not require the Trust to provide the permanent water supply by a specific date.
The Court observed that the Adjudicator’s conclusion was ‘startling’, and that he “went off on a ‘frolic’ by, in effect, inventing a case for PML which he considered to be superior to that which they actually advanced”.
Ground two
The court decided that the Adjudicator addressed the issue (as to whether PML had failed to issue a timely notification and as to whether it was entitled to a Compensation Event), and whilst he may have misunderstood the Trust’s case or confused the contractual regime, the same was not a breach of the rules of natural justice.
In any event, the Trust succeeded on its Grounds one and three . The court refused to enforce the Adjudicator’s decision on the basis that the Trust had a real prospect of establishing that the decision was reached in breach of the rules of natural justice.
Comment
Whilst adjudication decisions are regularly enforced, it is clear that a breach of the rules of natural justice may prevent enforcement. An adjudicator is not required to simply accept the submissions of either party and may reach a decision on a different basis to the arguments advanced. However, if an adjudicator intends to depart from the submissions of the parties, they must provide a fair opportunity to the parties to comment before rendering the decision. As noted by the court, ‘The first that the trust knew of the clause 60.1(3) case… was when they received the decision.’
The court’s conclusion in respect of Ground two also serves as an important reminder that even if an Adjudicator may arrive at an incorrect decision, the Court will not intervene in enforcement proceedings, to ‘pick over a Decision and consider which parts are correct and which are more doubtful’. The court’s stance is to enforce adjudication decisions, unless it is clear that an adjudicator has acted without or in excess of jurisdiction, or in breach of the rules of natural justice.
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