22nd Jun 2020 | Articles

Emily Moore has wrote an article on The Supreme Court sanctions the use of adjudication in the insolvency context:Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25


The Supreme Court has given judgment in what is being hailed as a landmark case in the construction and insolvency spheres. The decision has not only eliminated any doubt that there is jurisdiction for an insolvent company to adjudicate against a respondent with a potential cross-claim, but it has also endorsed the use of adjudication as a helpful tool for liquidators.

The key facts

Bresco agreed to perform electrical installation works for Lonsdale.Bresco later ceased to attend the construction site, alleging much later that it did so by way of acceptance of Lonsdale’srepudiatory breach. Bresco subsequently entered into CVL in 2015. Both parties later made claims against each other for breach of the construction contract. Bresco’s liquidator sought to refer the dispute to adjudication(it had both a statutory and contractual right to do so). Lonsdale issued Part 8 proceedings in the TCCfor a declaration that the Adjudicator lacked jurisdiction and for an injunction restraining further conduct of the adjudication.The trial judge, Fraser J, acceded to Lonsdale’s case on lack of jurisdiction. The Court of Appeal reversed Fraser J’s decision on jurisdictionbut held that the injunction should nevertheless be continued because, since there could be no enforcementof the Adjudicator’s award, it would be an exercise in futility and a waste of time and money. Bresco appealed to the Supreme Court against the continuation of the injunction. Lonsdale crossappealed on jurisdiction

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