Anrik Ltd V As Leisure Properties Ltd
Technology and Construction Court
8 January 2010
The developer denied that any contracts had been entered into with the contractor. The parties agreed to an ad hoc adjudication in respect of the contractor’s disputed claims. The adjudicator held that two contracts had been entered into and awarded the contractor a specified sum. The developer accepted that it could not oppose summary judgment being entered to enforce the decision but applied for a stay of execution of the judgment on the ground of the contractor’s inability to repay the judgment sum on the ground that the contractor would be unable to repay that sum in the event of the proceedings it had begun to reverse the adjudicator’s decision being successful.
Edwards-Stuart J held that execution should not be stayed. It could not be said that the contractor’s financial position had deteriorated from the time the relevant contract was entered into. The relevant contract was the parties’ ad hoc adjudication agreement since it was that contract which contained the machinery giving rise to the judgment debt and the developer had not adduced evidence to the court that the contractor’s financial position had deteriorated since that time up to the present. Whilst this lack of deterioration was of itself sufficient not to order a stay, it also could not be said that the contractor would probably be unable to repay the judgment debt. A serious risk or a serious doubt about the company's inability to repay was not of itself sufficient to order a stay unless it was shown that that risk or doubt amounted to a probability. There was no credible evidence on the (admittedly sparse) material before the court from which it was possible properly to conclude that it was probable that the contractor would be unable to repay the judgment debt. Whilst it could be said that there was a risk that the contractor would be unable to repay the judgment debt from the evidence before the court, that risk was inherent in the nature of the adjudication process and one which any party took when entering into a construction contract or any other form of agreement which contained adjudication provisions.