The inclusion of foreign jurisdiction clauses does not prevent adjudication
Motacus Construction Ltd v Paolo Castelli SpA (2021) EWHC 356 (TCC) has highlighted the English courts' continued endorsement of adjudication since the Construction Act 1996 came into force.
The case considered the enforcement of adjudication in novel circumstances. The sub-contract was governed by Italian law, subject to Parisian court jurisdiction, yet the dispute related to works at One Bishopsgate Plaza Hotel in London. It was argued that the works fell under the remit of the Construction Act 1996 because, although the contract contained no provisions for adjudication, the works were deemed construction operations. It was held that the Scheme for Construction Contracts 1998 was applicable, giving the parties the right to adjudicate at any time despite the contract's choice of law.
The parties entered into adjudication for the sum of £454,678.65. After a successful adjudication, Motacus applied for summary judgment to enforce the decision. Paolo Castelli argued that the decision could not be enforced as only Parisian courts had jurisdiction.
The judge referred to the Hague Convention on Choice of Court Agreements (the Convention). Article 6 sets out the general rule that the court "shall suspend or dismiss proceedings to which an exclusive choice of court agreement applies", however a number of exceptions apply.
The first exception raised by Motacus was under Article 6(c) which provides an exception for circumstances, whereby giving effect to the agreement would lead to injustice or be contrary to public policy. Motacus argued that it would be against the public policy enshrined in the Construction Act to refuse the enforcement of the adjudicator's decision. The court held that this did not apply as there is a high threshold for this exception, and there was no obvious reason why contract should not be enforced. As there was no evidence for why the adjudication could not be enforced in the Parisian courts, there was also no obvious injustice.
Motacus also sought to rely on Article 7 of the Convention, providing an exception for "interim measures of protection". The court is not prevented from granting, refusing or terminating such measures. As the adjudicator's decision and enforcement were only temporarily binding and intended to protect the decision pending the court's ultimate decision, this Article was deemed to apply. The court was not required to suspend or dismiss the proceedings.
Summary judgment was entered into in favour of Motacus for £454,678.65 plus interest of just over £10,000, enforcing the adjudicator's original decision, with Paolo Castelli paying Motacus' costs.
In practice it is rare that jurisdiction clauses such as the one in this case are included in construction contracts for works in the United Kingdom, but the case has provided clear guidelines for such circumstances. As well as showing how the English courts deal with enforcement regulations post-Brexit, this case emphasises the courts' continued support for adjudication as the first port of call in construction dispute resolution.