Absolute Rentals Ltd v Gencor Enterprises Ltd 2

United Kingdom

The Defendant's application for a stay to arbitration in defence of proceedings to enforce the adjudicator's award was refused on the grounds that there was no defence to the claim. An application to stay the judgment due to questions over of the Claimant's financial means was also refused

HHJ Wilcox QC, Technology & Construction Court

28 February 2000

The parties entered into a building contract pursuant to the JCT Agreement for Minor Works 1980 edition. This contained no adjudication clause, so the Scheme applied. The contract did contain an arbitration clause.

A applied to enforce the adjudicator's peremptory decision ordering payment of around £17,500 to it. G believed that it was entitled to apply for a stay to arbitration under section 9 of the Arbitration Act 1996, and relied upon Halki Shipping Corporation v Sopex Oils. Notice of arbitration had been given by G. The Court simply stated that G had no defence to A's application for summary judgment, and therefore G was not entitled to a stay.

G also submitted evidence questioning the financial viability of A, and requested that the Court stay judgment pending the outcome of G's claim in arbitration. The Court refused to do this, on the basis that it would frustrate the Scheme. The Court also stated that it was not in a position to judge the financial standing of either company, and it was not desirable that it do so on such an application, as it was possible that any impecuniosity of A had derived from G's failure to pay the adjudicator's award.

The Court emphasised that the purpose of the Scheme was to provide a speedy mechanism for settling disputes on a provisional basis, and requiring adjudicator's decisions to be enforced pending final determination, whether the decisions were wrong in law or fact, so long as they were within the terms of the adjudicator's reference.

The Defendant's application for a stay to arbitration in defence of proceedings to enforce the adjudicator's award was refused on the grounds that there was no defence to the claim. An application to stay the judgment due to questions over of the Claimant's financial means was also refused.