Balfour Beatty Construction Northern Ltd v Modus Corovest (Blackpool) Ltd [2008] EWHC 3029 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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This case confirms that courts will do their utmost to uphold the objective that underlies the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”) by enforcing an adjudicator’s decision unless it is plain that the question that the adjudicator has decided is not the question referred to him or the manner in which he has gone about his task is obviously unfair.

Mr Justice Coulson, Queen’s Bench Division, Technology and Construction Court


Modus employed Balfour Beatty to carry out design and construction works to a shopping centre.  During the course of the project, a dispute arose over whether certain work carried out by Balfour Beatty constituted a Change entitling it to additional payment under the contract and if so the sum that was due.  The dispute was referred to adjudication. The Adjudicator decided in Balfour Beatty’s favour and ordered Modus to pay £149,292.50 plus VAT plus interest within 7 days of his award.  This sum was subsequently included in an application for payment by Balfour Beatty in respect of valuation no. 30 issued under the contract by Modus’ agent.  Modus issued a valid withholding notice against this valuation in respect of liquidated damages for delay and refused to pay the Adjudicator’s award on that ground. 


Balfour Beatty applied to the court for enforcement of the Adjudicator’s award by way of summary judgment.

Modus opposed enforcement on the grounds that (1) the decision was not reasoned (as required under the contract), and (2) the Adjudicator had exceeded his jurisdiction and/or breached the rules of natural justice because he had (a) failed to consider a defence raised by Modus and (b) failed to give Modus an opportunity to put in a rejoinder to Balfour Beatty’s reply.

Modus also argued that by including the amount of the Adjudicator’s award in their application for interim payment leading to the issue of valuation no. 30, Balfour Beatty had elected to deal with the result of the adjudication in that particular way and could not now claim summary judgment.


The Court rejected all these arguments and awarded summary judgment to Balfour Beatty.
Although the Adjudicator had described his decision as “unreasoned”, the Court found that in substance it was reasoned and intelligible.  The failure of Modus to say that it had suffered prejudice as a result of the alleged absence of reasons was also seen as fatal to an attack of an Adjudicator’s decision on this ground. 

The Court rejected Modus’ criticisms of the Adjudicator on the grounds of jurisdiction/natural justice on the basis that:

  • there was nothing to suggest that the Adjudicator had failed to take Modus’ defence raised by the parties into account (the Adjudicator had decided the point and was not obliged to give detailed reasons for every part of his decision); and
  • Modus had never queried the adjudication timetable (which made no provision for a rejoinder) and had failed to show in any case that the rejoinder would or could have affected the outcome of the adjudication.

Balfour Beatty had not waived its right to be paid the amount awarded by the Adjudicator in accordance with the terms of his award by including it in an application for interim payment.  This was just one way in which Balfour Beatty could make a claim for the money due in respect of the Adjudicator’s decision and was manifestly not an election by Balfour Beatty nor a waiver of its right to be paid the sum identified by the Adjudicator in accordance with his decision, which stipulated payment within 7 days.

The Court held (adopting earlier authority) that there was generally an exclusion of the right to set-off from an adjudicator’s decision, and on the terms of the contract between Modus and Balfour Beatty (which were materially the same as in the earlier decision relied on), there was no such right. 

This summary was provided by CMS Cameron McKenna LLP.

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