TCC Refuses Enforcement on Natural Justice Grounds

Written by Louise Robling and Antaliya Mazlum.

The Technology and Construction Court (“TCC”) has delivered an important judgment reinforcing the limits of adjudicator’s powers and the importance of procedural fairness in construction disputes. 

In Premier Modular Ltd v Maidstone and Tunbridge Wells NHS Trust [2026] EWHC 1404, the Court refused to enforce a £1.65 million adjudication award after finding that the Adjudicator had decided the dispute on a contractual basis that neither party had advanced.

Acting for Maidstone and Turnbridge Wells NHS Trust (“the Trust”), our leading Construction & Engineering team successfully resisted summary enforcement proceedings. This critical decision confirms that while UK courts remain robustly supportive of adjudication, adjudicators cannot invent entirely new cases for a party.

The Judgment provides valuable guidance for employers, contractors, adjudicators and advisers involved in NEC contract disputes and adjudication proceedings. 

Background

The Trust engaged Premier Modular Limited (“PML”) under an amended NEC4 contract to build a new £19.8 million modular surgical theatre block at Maidstone Hospital. 

A dispute arose over the provision of a permanent mains water supply required for testing and commissioning. PML contended that the Trust was contractually required to provide the water supply by 30 October 2023, but it was not available until February 2024, causing delay and additional costs. The Trust accepted responsibility for providing the water supply but disputed that there was any contractual obligation to provide it by a specified date.

PML referred the matter to adjudication, relying on three specific NEC4 compensation event provisions under clauses 60.1 (1), 60.1(14) and 60.1(18), and claiming £1.3m for additional Defined Costs and the return of delay damages and interest  The Trust defended the claim on the basis that no valid compensation event had occurred and that PML had failed to comply with the condition precedent NEC notification requirements under clause 61.3. The Trust also contended that, even if there was a compensation event, the delay effect should be assessed against the Accepted Programme and not later programmes provided by PML, which had not been accepted.

The Adjudicator’s Decision 

The Adjudicator, Mr John Riches, issued a decision in which he found that there was a compensation event under clause 60.1(3) of the contract, that the Accepted Programme had been updated and that the NEC contract did not contain a condition precedent clause. Based on these conclusions he awarded PML a 14 week extension of time and just over £1.65 million. However, the award bypassed the specific contractual mechanisms and arguments submitted by both parties during the proceedings.

The Trust resisted the enforcement of the Adjudicator’s decision on three natural justice based grounds:

1. A compensation event based on clause 60.1(3) had been not raised by either party in their submissions in the adjudication. Neither had the Adjudicator put a case based on clause 60.1(3) to either of the parties. During the course of the adjudication, the Adjudicator had sought clarifications from both of the parties, but those clarifications did not invite submissions on clause 60.1(3).
2. The Adjudicator decided that the Accepted Programme had been updated, and yet, during the course of the adjudication, both parties had agreed that the only Accepted Programme was the original programme and that later programmes had not been accepted by the Project Manager.
3. The Adjudicator had failed to consider one of the Trust’s defences, which was that PML had failed to comply with a condition precedent.

The Court’s Decision 

Dismissing PML’s enforcement application, based on the first and second grounds referred to above, the Court concluded that the Adjudicator committed a material breach of the rules of natural justice as he had decided the central issue (whether or not the water main was supplied on time, giving rise to a compensation event) on a case that:

1. was not argued by either party;
2. was directly contrary to the common position between the parties;
3. was not put by the Adjudicator to the parties.

The Court emphasised the high threshold required to resist enforcement, noting that courts routinely tolerate mistakes of fact or law to protect the interim nature of adjudication. However, the Judge drew a clear distinction between an adjudicator reaching an incorrect answer on submissions and an adjudicator departing entirely from the referred dispute, and reaching a decision based on a case which had not been argued by either party. 

The Judge concluded that:

“On the face of it, that looks very much like an adjudicator going off on a frolic of his own, that is wishing to decide a case upon a factual or legal basis which has not been put forward by either side, without giving the parties an opportunity to comment.  Indeed, the Adjudicator here seems to have thought that the case which he devised under clause 60.1(3) provided a solution which was “that simple”, even though it had not occurred to either party.  He appears, therefore, to have decided a key point on a factual or legal basis that had not been argued or put forward in the submissions made to him.”

As to the third ground of challenge referred to above, the court concluded that, whilst the Adjudicator may have misunderstood the Trust’s case on the condition precedent clause in the NEC contract, or confused it with the early warning regime, that was not a breach of the rules of natural justice.

The Court concluded that this constituted one of those rare cases where there had been obvious unfairness, making the resulting £1.65 million award entirely unenforceable. 

Key takeaway

Natural justice challenges remain difficult but possible.  An adjudicator can adopt an independent contractual interpretation and reach conclusions that differ from the parties’ submissions. However, crucially, if a new point is potentially decisive, the parties must be given an adequate opportunity to address it.

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