Twintec Ltd v Volkerfitzpatrick Ltd: Injunctions restraining adjudication

The responding party to an adjudication may be granted an injunction restraining the referring party from pursuing the adjudication if the adjudicator has not been validly appointed.

Following the decision in Twintec Ltd v Volkerfitzpatrick Ltd [2014] EWHC 10 (TCC), an adjudication may be restrained if the adjudicator has no jurisdiction to determine the matter referred to him.  In this case, the referral was made under a dispute provision that did not form part of the contract between the parties.

Case overview

The case of Twintec Ltd v Volkerfitzpatrick Ltd concerned the construction of a warehouse and bottling plant near Bristol. Volkerfitzpatrick Ltd (“VFL”) was the main contractor and Twintec Industrial Flooring Ltd (“Twintec”) was the sub-contractor charged with constructing the floor slabs.

No formal sub-contract was ever entered into by the parties. In a letter of intent (“the LOI”) issued by VFL to Twintec, VFL stated that it was not yet in a position to enter into a sub-contract, but that Twintec was authorised to proceed immediately with all works necessary to achieve the design programme and construction programme in accordance with certain documents. The documents confirmed the parties’ agreement to use all the terms of the DOM/2 standard form of subcontract. Twintec carried out the works under the LOI.

The employer, Accolade Wines, started court proceedings claiming that the warehouse floor was defective.

VFL subsequently commenced adjudication proceedings against Twintec. VFL claimed the £850,000 costs of tests to the floor slabs, which VFL alleged were required primarily because of Twintec’s poor workmanship. VFL followed the default provision in the DOM/2 form of sub-contract and applied to the President of the RICS for the appointment of an adjudicator. An adjudicator was duly appointed.

In response, Twintec applied to the court for an injunction restraining VFL from pursuing the adjudication. 

The court decided in Twintec’s favour. Edwards-Stuart J granted Twintec the injunction to restrain VFL’s pursuit of the adjudication on the grounds that the adjudicator had not been validly appointed because the LOI did not incorporate the terms of the DOM/2 sub-contract. The adjudicator’s appointment under the provisions of the DOM/2 sub-contract was therefore invalid.

In his judgment, Edwards-Stuart J confirmed that the validity of the adjudicator’s appointment “goes to the heart of his jurisdiction”. An adjudicator has to be appointed under the correct contractual procedure or his appointment will be a nullity.

Practical implications

It is rare for the courts to grant injunctive relief to restrain ongoing adjudication proceedings. Edwards-Stuart J's decision to depart from the norm in this case can be said to have achieved a pragmatic outcome as the parties avoided incurring unnecessary and irrecoverable costs in respect of an ineffective adjudicator’s decision.

This case highlights how the courts are willing to intervene in the event that one party fails to validly appoint an adjudicator and emphasises the importance of entering into formal contracts to govern relationships. However, the facts in the Twintec case can be said to be unusual in that court proceedings were ongoing when the adjudication was referred. Consequently, the parties were able to appear before a judge quickly enough for the adjudication to be restrained. In view of this, what is the wider implication?  Is it practical to attempt to restrain an adjudication where the process is considered invalid but where there are no parallel court proceedings? 

In a typical, ‘stand-alone’ adjudication there may be difficulties in obtaining an injunction in such a short time frame. However, it may be possible to militate against this if the issue arises early enough in the proceedings and the aggrieved party makes the application as soon as possible. In such circumstances, this may provide a party with a means of avoiding the adjudication altogether.

DWF LLP’s Construction, Infrastructure & Projects team has a wealth of experience advising clients on all areas of construction law including drafting bespoke amendments to construction contracts and dispute resolution. 

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.