Partner Projects Limited v Corinthian Nominees Limited [2011] EWHC 2989 (TCC)

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Judgment Date: 23.11.2011


(1) In a dispute arising under a building contract based upon the JCT 1998 standard form of contract, Private Without Quantities with Contractor’s Design Portion, an adjudicator was entitled to award a contractor interest on sums which had not been certified by the architect.  (2) It was more likely than not that the contractor would not be able to repay the whole of the sum awarded by the adjudicator if ordered to do so but would be able to repay a major part of it.  However, the Court would not, in the particular circumstances of this case, order a stay of execution either in whole or in part of its judgment enforcing the award.

Technology and Construction Court, Edwards-Stuart J


In October 2003 Corinthian Nominees Limited (“Corinthian”) entered into a building contract with Partner Projects Limited (“PPL”) under which PPL was to construct a new five bedroom house. 

The contract was in the form of the JCT Standard Form of Building Contract, Private Without Quantities with Contractor’s Design Portion, 1998 edition.  Clause provided that the Architect was to issue Interim Certificates stating the amount due to PPL, that the final date for payment pursuant to an Interim Certificate was to be 14 days from the date of the Certificate, and that if Corinthian failed to pay the amount due to PPL by the final date for payment, Corinthian were to pay interest at the rate of 5% over Bank of England Base Rate current at the date the payment became overdue.  Clause 41 provided for disputes to be referred to adjudication, and clause 41A.5.5.8 empowered the adjudicator, in his decision, to decide the circumstances in which and the period for which interest should be paid, having regard to any term of the contract relating to the payment of interest.

The contract did not proceed smoothly and PPL made substantial claims for variations, delay and significant increased costs and expenses resulting from the alleged delays and design changes.  PPL referred these claims to adjudication.

In September 2011, the Adjudicator decided that Corinthian should pay PPL the sum of £850,509.35, which included an amount of £203,420.48 in respect of interest.

PPL applied to the Court for summary judgment to enforce the decision.  Corinthian resisted the application on the ground that the interest element of the decision was made without jurisdiction with the result that the decision as a whole was unenforceable.  Alternatively, Corinthian argued that any judgment be stayed pending the determination of Corinthian’s defence and counterclaim. 


The Court was asked to address the following issues: 

  • Whether the adjudicator had been entitled to award interest on sums which had not been certified by the architect.
  • If summary judgement was granted, whether execution of it should be stayed pending the trial, which was likely to take place in the Autumn of 2012.


In relation to the jurisdiction issue, the Court held that: 

  • Clause did not confer a power to award interest on sums which had not been certified; however, the Adjudicator was able to award sums greater than those certified by the architect because the contract gave him the power under clause 41A.5.5 to open up and review certificates. 
  • In his award, the Adjudicator had opened up, reviewed and revised the architect's certificates and substituted for the sums actually certified the sum that he considered should have been certified.  Thus the effect of the Adjudicator's decision was to substitute for the sums certified by the architect in the certificates the sums found due by the Adjudicator.  Once this had been done, the Adjudicator was entitled to award interest on the sums due under the corrected certificates.  This was not an excess of jurisdiction. 
  • In any event, the Notice of Intention to refer the dispute to adjudication had specifically invited the Adjudicator to decide whether, pursuant to clause of the Conditions, PPL was entitled to interest on the sum found due to it.  Accordingly, the question of PPL's entitlement to interest under clause on sums that had not been certified was squarely covered by the Adjudicator's terms of reference.  Thus, even if the Adjudicator had concluded that PPL was entitled to interest under clause when, on a true construction of that clause, it was not entitled to such interest, he would have made an error of law when determining a question that had actually been referred to him.  It would not have been a case of answering the wrong question but of answering the right question in the wrong way.  It was well settled that the latter did not afford a ground for challenging an adjudicator's decision.

In relation to Corinthian’s application to stay any judgment, the Court held that:

  • On the financial information made available by the parties, it was more likely than not that PPL would not be able to repay the whole of the £850,000 if ordered to do so in October/November 2012, but that it would be able to repay a major part of it. 
  • PPL’s present financial position had been brought about to a significant extent by the default of Corinthian in failing to pay the sums that the Adjudicator had now found were due.
  • It appeared that between 2003 and 2006 Corinthian was trading whilst insolvent.  The Court was entitled to take this into account when exercising its discretion whether or not to grant a stay.
  • PPL genuinely wished to try and trade itself out of its present indebtedness if it could do so.  It would only be able to do so if it received payment of the sum awarded by the adjudicator.
  • Having regard to all the above matters, execution of the judgment should not be stayed in whole or in part.

This summary was provided by CMS Cameron McKenna LLP.

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