Jurisdiction(s):
United Kingdom

Henry Construction v ProMEP: TCC holds CVA did not compromise sub-contractor’s adjudication claims; insolvency set-off depends on CVA terms; fraud-based enforcement defence rejected (England and Wales)

Published on: 29 July 2024

Published by a LexisNexis Construction expert

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Article summary

Henry Construction Projects Limited v ProMEP Ltd [2024] EWHC 1825 (TCC) What are the practical implications of this case?

This judgment grappled with several intricate legal and procedural questions, notably the effect of a company voluntary arrangement (CVA) on claims taken to adjudication, and assertions that an adjudicator’s decision was secured through fraud. It serves as a useful prompt of the principles the court will apply when a party involved in adjudication is insolvent, and where it is alleged the adjudicator was misled by a fraudulent misrepresentation. The principal points for construction practitioners include:

Insolvency set-off does not engage automatically upon entry into a CVA. The consequences of a CVA hinge on its wording, interpreted according to the orthodox principles of contractual construction
If a purportedly fraudulent act could have been advanced as a defence within the adjudication but was not, it will generally not be available later as a defence to enforcement of the adjudicator’s decision...

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