When Can A Party Seek A Stay Of An Adjudicator's Decision?

In Grosvenor London Limited v Aygun Aluminium UK Limited [2018] EWHC 227 (TCC), the court extended the long-established grounds on which a party can seek a stay of execution of an adjudicator's decision.

Introduction

Grosvenor London Limited ("Grosvenor") made an application for summary judgment in respect of an adjudicator's decision which was made in its favour against Aygun Aluminium Limited ("Aygun"). The amount of the decision was £553,958.47 plus VAT. The application was resisted by Aygun on the basis of fraud. Aygun also brought its own application for a stay of execution, in the event that its opposition to the summary judgment application was unsuccessful.

The facts

Grosvenor and Aygun were parties to a contract entered into in May 2016 ("the Contract") for Grosvenor to perform certain cladding and other associated works for the installation of a facade at the Ocean Village hotel in Southampton.

The project fell into delay and Grosvenor referred a dispute to adjudication. The adjudicator awarded £553,958.47 plus VAT to Grosvenor, which was for outstanding labour costs.

The adjudication enforcement proceedings

In the adjudication enforcement proceedings, Aygun raised, as part of its defence, an allegation of fraud. It said that following some enquiries "it is now the Defendant's case that a substantial proportion of the Claimant's award is based on sums fraudulently invoiced to the Defendant". In essence, Aygun claimed that there was an "enormous discrepancy" between sums invoiced by Grosvenor and works actually done or labour actually provided. Aygun argued that at least £300,000 had been fraudulently invoiced. Aygun accepted that it had not raised this as a defence in the adjudication, arguing that the relevant information was not available to it at that time.

Despite the range of allegations and witness statements served by Aygun, Grosvenor had served no evidence at all. The Judge described this as "extraordinary".

The Judge considered the principles that apply on enforcement when fraud is alleged. If fraud is to be raised in an effort to avoid enforcement, it must be supported by clear and unambiguous evidence and argument. Further, a distinction has to be made between fraudulent acts that could have been raised as a defence in the adjudication and those which neither were nor could reasonably have been raised but which emerged afterwards.

The Judge recognised that a particular issue for Aygun was why it had not raised some of...