Does A Foreign Jurisdiction Clause Prevent An English Court Enforcing An Adjudicator's Award?

• Published date: 03 April 2021
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
• Law Firm: Gowling WLG
• Author: Mr Ashley Pigott and Cathy Moore

You might have assumed that if both parties have agreed that their construction contract will be subject to (say) Italian law, and agreed an exclusive jurisdiction clause in favour of the French courts, you have side-tracked any disputes away from the courts of Great Britain. The recent case of Motacus Constructions Ltd v Paolo Castelli SpA [2021] has confirmed that this is not necessarily the case in relation to construction projects that fall within the ambit of the Housing Grants, Construction and Regeneration Act 1996, as amended (the Construction Act).

Background

• In May 2019, Paolo Castelli appointed Motacus to supply and install certain walls, plasterboards, partitions, ceilings, back boxes, flooring and painting in relation to fitting out works to a hotel in London (the Contract).
• In the Contract, the parties agreed that the governing law of the Contract would be Italian law, and that disputes would be subject to the exclusive jurisdiction of the courts of Paris France.
• The Contract did not comply with s108 of the Construction Act providing for adjudication and so, the adjudication provisions of the Scheme for Construction Contracts 1996 as amended (the Scheme) were implied into the Contract. One of the provisions of the Scheme is that that the decision of an adjudicator binds the parties until the final determination of the dispute.
• A dispute arose relating to sums due under the Contract and an adjudication followed, with a decision in December 2020 that Paolo Castelli should make a payment to Motacus of around '454,700 plus VAT and interest. That payment was not made and Motacus commenced these proceedings to enforce the adjudicator's decision.

The jurisdiction issue

Paolo Castelli's only defence to these enforcement proceedings was that the (English) Court had no jurisdiction to determine this application for summary judgment as the application was in breach of the Contract, which conferred exclusive jurisdiction on the courts of Paris.

The question therefore to be decided by the Technology and Construction Court (TCC) was whether the inclusion of an exclusive jurisdiction clause in favour of a foreign court precludes the English court from hearing proceedings for breach of the term that the decision of an adjudicator binds the parties until the final determination of the dispute.

TCC decision

Following Brexit, such jurisdictional issues are determined by the Convention on Choice of Court Agreements concluded on 30 June 2005 at the Hague (the...