Premier Modular Limited v Maidstone and Tunbridge Wells NHS Trust [2026] EWHC 1404

Premier Modular Limited (“PML”) (represented by Mathias Cheung) sought to summarily enforce a decision of the adjudicator in the sum of £1.7m against Maidstone and Tunbridge Wells NHS Trust (“the Trust”) (represented by Edmund Neuberger). Summary judgment was not granted on the basis that the Defendant has a real prospect of succeeding on its contention that the Decision was arrived at in breach of the rules of natural justice.

Background

The parties executed a contract for the construction of a new theatre block under an amended NEC Option 4 contract. During the works a dispute arose concerning the availability of permanent mains water.

PML asserted that it required a permanent mains water supply to be made available not later than 30 October 2023 for the testing and commissioning of elements of its work and that the Trust failed to make it available until 20 February 2024, causing delay. The Trust’s position was that it was responsible for the mains water supply, but there was no requirement for it to be made available by any particular date.

A dispute arose as to whether PML was entitled to a compensation event which was referred to adjudication and Mr John Riches was appointed as adjudicator.

In its Notice of Adjudication, PML alleged that it was entitled to a compensation event pursuant to Clause 60.1 of the contract. PML developed its case in the Referral, clarifying that the compensation events arose under Clauses 60.1(1), (14) and (18) of the contract.

The Trust’s defences to the adjudication included (1) that there was no compensation event under Clauses 60.1(1), (14) and (18) of the contract; and (2) even if there was a compensation event under Clauses 60.1(14) or (18), it had not been notified in accordance with the condition precedent at Clause 61.3.

If there was a compensation event, there was a further dispute between the parties as to whether its delay effect should be assessed against:

• The Accepted Programme. It was common ground that the original Accepted Programme had not been updated and that it contained no obligation on the Trust to provide permanent water by a particular date;

• A later revision of the programme. It was common ground that later revisions of the programmes were not Accepted Programmes, and that PML had included dates for when the Trust was to provide permanent water.

During the adjudication, the adjudicator also sought clarifications from the parties on their respective cases. As part of those clarifications, the Adjudicator set out the text of Clause 60.1(3), a compensation event not relied on by either party, and asked “Is the revised programme Contract Programme Rev2 dated 14 July 2023 an Accepted Programme?”.

The parties responded clarifying that the Accepted Programme had not been updated and neither party addressed Clause 60.1(3).

In his decision, the adjudicator found (1) that the Accepted Programme had been updated; (2) that PML was entitled to a compensation event under Clause 60.1(3); and (3) that there was no condition precedent in the contract.

The Trust did not pay the award and PML sought to summarily enforce it in Court.

Decision

The Trust argued that the adjudication decision was contrary to natural justice and advanced three grounds for resisting enforcement:

Ground 1: The Adjudicator’s central finding that there had been a compensation event was made on a contractual basis that had not been raised by the parties and on which neither party had made submissions. This was said to be an unforeseen and unforeseeable aspect of the Decision that goes to its heart.

Ground 2: The Adjudicator failed to address one of the Trust’s defences to the Compensation Event claim, namely that PML had failed to comply with a condition precedent.

Ground 3: The finding that the Accepted Programme had been updated was not part of the Adjudication and was contrary to the position adopted by both parties in the Adjudication.

The Court identified two broad forms of natural justice challenge:

• An allegation that the Adjudicator has failed to consider a defence;
• Complaint that the Adjudicator has decided the dispute upon a basis which the responding party did not have an adequate opportunity to deal with.

The relevant authorities for the second type of challenge were Cantillon Ltd v Urvasco Ltd [2008] B.L.R. 250 and Roe Brickwork Limited v Wates Construction Limited [2013] EWHC 3417. The Court highlighted that it is only if the adjudicator goes off on a “frolic of his own”, that is wishing to decide a case upon a factual or legal basis which has not been argued or put forward by either side, without giving the parties an opportunity to comment or, where relevant put in further evidence, that a breach of the rules of natural justice may arise.

The Court highlighted its sympathy for the difficult task which adjudicators have to perform, seeking to deal with complex disputes under great pressures of time and emphasised the courts’ scepticism with losing parties who, rather than paying now and arguing later, seek to resist enforcement on unmeritorious grounds.

The Court considered Grounds 1 and 3 together, deciding:

• That the points had not been argued by either party, had not been put by the Adjudicator to the parties and, as regards the Accepted Programme, was contrary to the parties’ common position.

• It was no defence that the Notice of Adjudication was broadly drawn, referring to the entirety of Clause 60.1. That would answer a jurisdictional challenge, but not a breach of natural justice.

• The clarification sought by the Adjudicator did not ask the parties to consider whether Clause 60.1(3) was in play. It only asked for assistance on the status of Contract Programme Rev 2 dated 14 July 2023 as an Accepted Programme.

• While it is correct that an adjudicator is not obliged to decide a case only by accepting the submissions of one party or the other, if he is to depart from the submissions of both parties, he must ensure that the issues have been fairly canvassed.

The Judge concluded that it was a breach of the rules of natural justice not to put to the parties that Clause 60.1(3) was relevant or that the Accepted Programme had been updated. In doing so, the Adjudicator went off on a “frolic” by, in effect, inventing a case for PML which he considered to be superior to that which they actually advanced.

In light of the conclusions on Grounds 1 and 3, Ground 2 was considered briefly. The Judge found that while the Adjudicator may have misunderstood the Trust’s case or confused the contractual regime for Early Warnings with the provisions of Clause 61.3, that was not a breach of the rules of natural justice and it is not for the court in enforcement proceedings to pick over a decision and consider which parts are correct and which are more doubtful.

The Judge concluded that this was one of those rare cases where there had been obvious unfairness. Rather than a matter being overlooked or misunderstood as a matter of time pressure or due to the difficult task faced by adjudicators, the adjudicator had sought to create a case for PML which PML had not made and with which the Trust had no proper opportunity to deal, even by the hectic standards of adjudication.

Mathias Cheung was instructed by Fenwick Elliott LLP for the Claimant seeking enforcement.

Edmund Neuberger was instructed by Bevan Brittan LLP for the Defendant successfully resisting enforcement.

You can read the full judgment here.