Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd

Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd

A company in liquidation retains the statutory and contractual right to refer disputes under a construction contract to adjudication, even where cross-claims trigger insolvency set-off. Adjudication is not incompatible with insolvency set-off, nor is it futile, as it serves as a mainstream dispute resolution mechanism. The existence of cross-claims does not deprive the adjudicator of jurisdiction, and any issues regarding enforcement can be addressed at the enforcement stage, not by restraining adjudication.

Parties
Appellant/cross Respondent: Bresco Electrical Services Ltd (In Liquidation); Respondent/cross Appellant: Michael J Lonsdale (Electrical) Ltd
Jurisdiction
England and Wales
Judgment Date
17 June 2020
Procedural Posture
Appeal / Supreme Court Judgment
Outcome
Appeal allowed; cross-appeal dismissed.
Legal Topics
Adjudication, Insolvency Set Off, Jurisdiction, Injunctions, Enforcement of Adjudicator's Decisions
Construction Law Insolvency Law Civil Procedure Adjudication Insolvency Set Off Jurisdiction Injunctions Enforcement of Adjudicator's Decisions

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Parties

Bresco Electrical Services Ltd (In Liquidation)

Appellant/cross Respondent

Michael J Lonsdale (Electrical) Ltd

Respondent/cross Appellant

Procedural Posture

Appeal / Supreme Court Judgment

Legal Issues

  1. 1 Whether a company in liquidation can refer disputes under a construction contract to adjudication when insolvency set-off applies
  2. 2 Whether adjudication is futile or incompatible with insolvency set-off
  3. 3 Whether the adjudicator has jurisdiction in such circumstances

Ratio Decidendi

A company in liquidation retains the statutory and contractual right to refer disputes under a construction contract to adjudication, even where cross-claims trigger insolvency set-off. Adjudication is not incompatible with insolvency set-off, nor is it futile, as it serves as a mainstream dispute resolution mechanism. The existence of cross-claims does not deprive the adjudicator of jurisdiction, and any issues regarding enforcement can be addressed at the enforcement stage, not by restraining adjudication.

Court Disposition

Appeal allowed; cross-appeal dismissed.

Orders

  • The injunction restraining the pursuit of adjudication is lifted.
  • Bresco is entitled to pursue adjudication of its dispute under the construction contract.