Party time! TCC tests the limits of legal capacity to commence an adjudication

In two recent cases, the TCC has considered the extent to which assignees and parties subject to joint and several obligations can commence adjudication on their account. Enforcement of an adjudication decision was narrowly permitted in one case and refused in the other, highlighting the significance which such issues can have for referring parties. Appeals are pending in relation to both issues. A number of drafting solutions exist, as discussed in this article. 

Paragon Group Limited v FK Facades Limited

Paragon took an assignment of an employer's rights under an amended 2016 JCT Minor Works Building Contract (the “Contract”). In 2025, Paragon terminated the Contract, alleging culpable delay, and claimed liquidated damages. FK Facades disputed liability and Paragon commenced adjudication, resulting in an award in its favour. However, FK Facades refused to pay, contending that Paragon, as an assignee, was not a party to the Contract and lacked capacity to refer a dispute to adjudication. 

The TCC acknowledged there was no direct authority on this particular question of law and considered the issue from first principles. Although the court found the point finely balanced, it was satisfied on an objective interpretation of the Contract that an assignee could adjudicate against the original counter-party. 

The Contract incorporated the Scheme rules, which gave a right to adjudicate to “any party to the construction contract”. In the court’s judgment, although an assignee does not become a party to the contract (that would require novation), the reference to a “party” was to be considered in the context of the express assignment provisions within the Contract and against the background of the general law of contract and assignment. Under the law of assignment, a statutory assignee takes both the rights assigned to it as well as the remedies available to enforce those rights. Having expressly permitted the making of assignments, the court considered that, “one might expect a permitted assignee to have all of the rights and remedies passing at law with the rights assigned unless or to the extent that such rights were excluded, expressly or by necessary implication.”

Darchem Engineering Ltd v Bouygues Travaux Publics 

Darchem, as one company within an unincorporated joint venture (“JV”), entered into a subcontract for the procurement, off-site manufacture, pre-fabrication, factory testing, delivery to site, pre-assembly, installation and testing of stainless-steel pools, pits and tanks for Hinkley Point C nuclear power station in Somerset. The subcontract (an amended NEC form) explicitly defined the “Parties” as the “Contractor” and the “Subcontractor”. The “Subcontractor” was further defined as the joint venture (and not its individual members).The subcontract was signed separately by the two JV members and noted that their liability was to be joint and several. 

Darchem commenced an adjudication independently of its JV partner and obtained a decision in its favour. On enforcement, it was argued that Darchem alone could not constitute a “Party” for the purpose of the adjudication clause in the subcontract. The TCC agreed, ruling that only the JV members acting together could adjudicate.

In the court’s judgment, the contractual wording was clear, and numerous provisions within the subcontract implied a bilateral relationship (i.e. clauses referring to “either Party” or “the other Party”). Further, where the subcontract intended the term “Party” to refer to individual JV members (e.g. insolvency provisions), it did so expressly. The court took the absence of similar language in the adjudication clause as intentional.

The fact the subcontract was signed separately by each of the JV members was not conclusive and merely reflected the JV’s lack of legal personality. The court also emphasised the potential absurdity of allowing each JV member to adjudicate separately. For example, given the contractor was also a two member unincorporated joint venture, a simple payment dispute could give rise to four concurrent adjudications if each of the subcontractor JV members were to commence separate adjudication proceedings against each of the contractor joint venturers. 

Conclusions and implications

Whilst it is well-established that the TCC adopts a robust approach to adjudication enforcement, these cases show that technical issues over a party’s capacity to commence an adjudication require careful consideration and can derail attempts to enforce an adjudication decision. 

In the Paragon case, the court found the issues in relation to assignee capacity “finely balanced”. It is notable, therefore, that a similar case in relation to the enforcement of an ICSID award was recently decided against an assignee. In OperaFund Eco-Invest SICAV plc v Spain, it was argued that Article 54(2) of the ICSID Convention, which refers to a “party seeking recognition or enforcement”, was wide enough to include an assignee of an award. Despite acceptance of such an argument by courts in Australia, the English Commercial Court found that the word “party” meant only a party to the original arbitration the subject of the award. An appeal from this decision will be heard by the Court of Appeal later this year. For our article on the first instance decision please click here.

Similar uncertainties also affect the TCC’s decision in Darchem. Whilst the subcontract in that case was an amended NEC form, a significant part of the court’s analysis turned on bespoke amendments to the standard form. Moreover, the Court of Appeal has last week given Darchem permission to appeal.

In light of the uncertainty surrounding these issues, parties involved in projects where assignments are likely, or where contracting parties are not single corporate entities, should give thought to addressing such issues expressly in their contracts. For example, adjudication or assignment clauses could make clear whether or not an assignee is entitled to adjudicate in its own name. Alternatively, “name borrowing” arrangements could be considered (allowing adjudications to be brought in the name of the assignor, but managed and funded by the assignee). 

Similarly, in respect of joint venture parties, express clauses could clarify whether adjudications brought by only one of the JV members are permissible. This could, for example, include boilerplate language stating that where a party is comprised of more than one entity, rights under the contract must be exercised by those entities acting jointly. 

References:

OperaFund Eco-Invest SICAV plc v Spain [2025] EWHC 2874 (Comm)

Paragon Group Limited v FK Facades Limited [2026] EWHC 78 (TCC)

Darchem Engineering Ltd v Bouygues Travaux Publics & Anor [2026] EWHC 220 (TCC)