Kerry Underwood

WINDING UP PETITIONS AND ADJUDICATORS’ DECISIONS

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In Victory House General Partner Ltd, Re A Company [2018] EWHC 1143 (Ch)

the Chancery Division of the High Court dismissed a winding up petition where a contractor sought to enforce a judgment debt arising out of an adjudicator’s decision.

There had been two adjudications and the first adjudicator had decided the sum due under interim application 30 (IA 30) and the second adjudicator then determined the contractor’s work up to and including IA 31.

The second adjudicator determined the gross value at £7.087 million and the net value at £6.98 million, which was less than then the sum of £8.5 million paid on account, and so there was nothing due under IA 31.

In the winding up proceedings, the employer argued that if it paid the judgment sum, then it would have a cross-claim based on the second adjudicator’s decision, which would immediately entitle it to request repayment in restitution.

The employer relied in part on

Grove Developments Ltd v S&T (UK) Ltd [2018] EWHC 123 (TCC)

and submitted that its case was stronger than in the Grove case as here the adjudicator had not been asked to consider the same interim application, but had carried out the sort of true valuation exercise envisaged in Grove.

The court accepted that the cross-claim was genuine and that the debt was disputed on substantial grounds – see

Re Bayoil SA [1998] EWCA Civ 1364.

The court held that dismissing the petition was a “more just result” particularly in circumstances where the employer had paid substantially more than the contractor was entitled to under the contract and it would be “quite wrong”  for the company to be wound up for failure to pay a further sum.

The case re-inforces the difficulty of using a winding up petition to enforce a judgment debt arising out of an adjudicator’s decision.

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Written by kerryunderwood

June 5, 2018 at 8:27 am

Posted in Uncategorized

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