In the recent case of South Coast Construction Ltd v Iverson Road Ltd  EWHC 61 (TCC), the contractor (South Coast) commenced enforcement proceedings against the employer (Iverson Road) in respect of an adjudicator’s decision awarding it circa £900,000. Just prior to the hearing date of 18 January 2017, the defendant’s (Iverson Road) solicitor wrote to the court enclosing a Notice of Intention to Appoint an Administrator (“NOI”) dated 4 January 2017. The NOI triggered an automatic statutory moratorium for a period of 10 clear business days and, as such, did not expire until the end of 18 January 2017 (the date of the hearing). Accordingly the defendant’s solicitor’s letter stated that the hearing date “must be vacated and the action discontinued”.
The court has the power to permit proceedings to continue notwithstanding that a statutory moratorium is in place, so a preliminary issue for Coulson J to determine was whether the enforcement proceedings should continue. Although Coulson J gave his decision on 19 January 2017, meaning that the moratorium had ended, he still gave a fully reasoned judgement in respect of this issue.
Coulson J decided that he would have given permission for the enforcement claim to continue for two reasons:
- Applying the balancing exercise referred to In Re Atlantic Computer Systems PLC  CH 505 he felt that allowing the proceedings to continue was favourable. The proceedings were very far advanced, no additional costs would be incurred by deciding the enforcement claim and it would not be in anyone’s benefit for the court to decline to determine the enforceability of the adjudicator’s decision. Coulson J was also critical of the employer’s conduct, there had been two previous NOI’s that neither the contractor nor the court had been informed of at the time.
- Referring to Chadwick LJ in Carillion Construction v Devonport Royal Dockyard  EWCA Civ 1358 and the “pay now, argue later” nature of adjudications, Coulson J decided that, as adjudication proceedings presuppose a decision by an adjudicator on the merits, a party such as the claimant (South Coast) was in a stronger position than most to argue that the court should exercise its discretion and continue with the proceedings.
Coulson J’s decision highlights the pro-enforcement stance of the TCC in relation to adjudicator’s decisions and its reluctance to allow insolvency to act as a bar to enforcement.
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