The Claimant, Gosvenor London Ltd (“Gosvenor”), sought summary judgment in respect of an adjudicator’s decision in its favour, while the Defendant, Aygun Aluminium UK Ltd (“Aygun”), sought a stay of execution. The adjudicator had awarded Grosvenor £553,958 in respect of disputes that arose from a contract to perform cladding works at a hotel for Aygun. In addition, Aygun applied for a stay of execution in the event that Gosvenor succeeded in obtaining summary judgment. This application was made on the grounds of allegations of witness intimidation and fraud, claiming that there were material discrepancies in the accounts filed by Gosvenor at Companies House.

Fraser J held that the adjudicator’s decision would be enforced. A distinction had to be drawn between fraudulent behaviour; acts or omissions which were or could have been raised as a defence during the adjudication and those which could not reasonably have been raised at the time and emerged afterwards. As these allegations of fraud had been made prior to the commencement of adjudication, they should have been deployed in the adjudication. In particular, the valuation evidence showing the large discrepancy in sums invoiced to Aygun and actual work completed should have been set out. The Judge made clear that such improper management of projects would not provide immunity with regards to the enforcement of adjudicators’ decisions.

The second issue Fraser J decided on was Aygun’s application for a stay of execution. The principles from Wimbledon Construction Co 2000 Ltd v Vago [2005] EWHC 1086 (TCC)were applied and the Judge held that while the case at hand did not fall squarely within the Wimbledon factors, “special circumstances” existed and therefore justified the grant of a stay of execution. These were the facts relating to the alleged fraudulent acts, the behaviour of the Grosvenor’s employees and the highly unsatisfactory accounts of Grosvenor. Fraser J added a further principle; if the evidence demonstrates that there is a real risk that any judgment would go unsatisfied by reason of the claimant organising its financial affairs with the purpose of dissipating or disposing of the adjudication sum so that it would not be available to be repaid, then this would also justify the grant of a stay. This additional principle was caveated by certain considerations. It will only apply in exceptional cases and a high threshold would be applied: a similar standard to the evidence required to grant a Freezing Order. Fraser J also made clear that this principle applies only with regard to the risk of dissipation and is not designed to prevent claimants from dealing with their adjudication sum in the ordinary course of business.

This case demonstrates the importance of fraud allegations being properly particularised and where known to exist at the time of adjudication, fraud should be specifically pleaded as opposed to forming the basis of allegations to avoid enforcement following an adjudicator’s decision. Whilst the courts will be wary of the narrow timeframe within which adjudications take place, the limited time available will not be used to explain the failure to raise issues of fraud during the adjudication where it is considered the information is reasonably discoverable. This extension of the principles in Vago regarding the grant of a stay reflects an attempt to prevent construction companies suspected of engaging in fraudulent activity from abusing the adjudication process. However the high evidential threshold means it is unlikely to open the floodgates and the range of circumstances and evidence deemed to be sufficient will undoubtedly be tested in the courts in the future.