Resisting adjudication enforcement on “no contract” and “wrong contract” grounds
The statutory right to adjudicate construction disputes provides a powerful mechanism for rapid dispute resolution, but its effectiveness depends on the existence of a valid underlying contract. A recent TCC decision provides important clarification on when challenges based on disputed contract formation will succeed, and when an adjudicator's determination of the correct contract will - and will not - bind the parties.
“No contract” and “wrong contract” arguments
The leading Court of Appeal authority on challenges to an adjudicator's jurisdiction based on disputed contract formation is Pegram Shopfitters v Tally Weijl (UK) Ltd. In that case, the claimant contended that the contract was formed on its own standard terms containing no adjudication provisions, meaning the Scheme for Construction Contracts (the “Scheme”) applied by reason of section 108 of the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”). The defendant, on the other hand, contended that a JCT standard form with its own adjudication provisions governed, or alternatively that there was no contract at all.
Lord Justice May identified what he described as “twin difficulties” facing the claimant:
"[Counsel's] submission however, overlooks the fact that the only circumstance in which the adjudicator would clearly have had jurisdiction was if the claimant's contentions as to the contractual terms were correct. The fact that adjudication under the Scheme and adjudication under a JCT Prime Cost Contract would be similar procedures does not overcome the twin difficulties that Mr Morris was appointed under the Scheme, and that a sufficiently secure identification of the contractual terms was necessary to the proper performance of his adjudication task."
Subsequent cases have not always been clear as to the extent to which differences in adjudication procedure were required between the competing contractual positions for such arguments to succeed; or what constitutes a “sufficiently secure identification” of contractual terms in any given case. A recent TCC case sheds significant light on these issues.
High Tech Construction Ltd v WLP Trading and Marketing Ltd
High Tech Construction Limited ("HTC") agreed with WLP to carry out certain sub-contract works in relation to a residential development in London. HTC commenced adjudication proceedings seeking payment under the terms of a JCT Design and Build Sub-Contract allegedly executed on 26 January 2023 (the "January JCT Contract").
WLP disputed the existence of the January JCT Contract entirely and objected to the adjudicator’s jurisdiction. It contended that the document relied upon by HTC was fabricated and that no JCT-based contract had ever been agreed. WLP claimed that the parties had instead entered into an informal oral and WhatsApp-based arrangement for enabling works and a separate lump sum agreement for reinforced concrete frame works only. Critically, any dispute under either of these alternative contracts would have been capable of being referred to adjudication pursuant to the Scheme.
The adjudicator rejected WLP’s challenge and proceeded to determine that HTC was entitled to payment of £2,142,623.35 plus interest. WLP renewed its objection before the TCC on enforcement.
Was a difference in adjudication procedure required?
WLP had supplemented its evidence in the TCC proceedings and the court accepted that there was a real prospect of WLP succeeding in showing that the January JCT Contract was fabricated. However, HTC argued that this was insufficient to resist enforcement, given that the Scheme rules applied regardless of which contract was correct. HTC argued that the second of the twin difficulties noted in Pegram (i.e. the requirement for a "sufficiently secure identification of the contractual terms") was no longer good law. This submission was based on the age of the Pegram decision, the repeal of section 107 of the Construction Act (which had required contracts to be in writing), and subsequent Court of Appeal decisions such as Carillion Construction v Devonport Royal Dockyard emphasising that adjudicators’ decisions must be enforced even where there are errors of procedure, fact or law.
The court rejected this submission, holding that no Supreme Court or Court of Appeal decision had come close to casting doubt on either the outcome or reasoning in Pegram. The Carillion line of authority did no more than emphasise what May LJ himself had recognised—that the court should be vigilant to examine jurisdictional arguments critically and not be deterred from giving summary judgment where such arguments are insubstantial.
Accordingly, because there was an arguable case that the contract adjudicated on had never existed - even though the competing contractual framework would still have led to the Scheme applying - enforcement was refused.
What is a “sufficiently secure identification of the contract terms”?
The court also considered the extent to which the contract relied on by the referring party must be put in doubt before a jurisdictional objection arises. Previous cases had found that where there is agreement over the existence of a contract, but a dispute as to whether all relevant work was undertaken pursuant to that contract or under different contracts, the adjudicator will have jurisdiction under the acknowledged contract to determine the scope of work falling within it. Likewise, the fact that the contract has been misdescribed in certain respects or there is a dispute as to its precise terms will not deprive an adjudicator of jurisdiction. However, in the court’s judgement, a line is crossed where:
“the claiming party has not merely misdescribed the foundational contract, or there is a dispute as to some of its terms, but where there is a fundamental dispute as to the very existence or essence of the contractual arrangement pursuant to which the adjudicator was appointed. Providing that the jurisdictional challenge has not been lost, if the defendant's argument in this respect has a real prospect of success, summary judgment is likely to be inappropriate. … That such a line in the sand exists gives meaning to the second of the twin difficulties which faced the Claimant in Pegram.”
The court noted that whether any given dispute is to be characterised as one of misdescription or going to the very existence of the contract will depend on a critical examination of the relevant facts and that difficult cases are likely to exist in the middle of the range between these two concepts.
Conclusions and implications
The judgment in this case provides helpful guidance on a complicated and difficult area of law. It confirms that the “twin difficulties” identified in Pegram remain good law and that the requirement for a sufficiently secure identification of the contractual terms still stands, even where no doubt exists as to the correct adjudication procedure. The court’s guidance as to the point at which such contract formation arguments go beyond mere misdescription is also to be welcomed, although the precise boundary between misdescription and “existential” challenges will need to be fleshed out in future cases.
One question potentially left open by the judgment is whether in a misdescription case, which involved debate over the correct adjudication procedure, the adjudicator would have jurisdiction to rule on the issue. On one view, the first difficulty in Pegram might be thought to prevent this as the dispute goes to the correct procedure for the appointment of the adjudicator.
References:
Pegram Shopfitters v Tally Weijl (UK) Ltd [2004] 1 WLR 2082
Carillion Construction v Devonport Royal Dockyard [2005] BLR 310
High Tech Construction Ltd v WLP Trading and Marketing Ltd [2026] EWHC 152 (TCC)
