In an ideal world, before the start of any construction project, the parties would sign written contracts, clearly setting out all of the agreed terms between them. However, in reality, many works start before an agreed contract is in place. During the works there may be subsequent negotiations over contract terms between the parties which may or may not result in a signed contract or contracts. This unfortunately leaves room for future disputes over obligations, scope and fees…but what about the fundamental existence of a contract? In the recent case of High Tech Construction Ltd v WLP Trading and Marketing Ltd [2026] EWHC 152 (TCC) the court was required to consider whether the adjudicator had jurisdiction to decide a dispute in circumstances where one party argued that the contract pursuant to which he had had been appointed did not in fact exist.
Background
- High Tech Construction Ltd (HTC) carried out some construction works for WLP Trading and Marketing Ltd (WLP) between early 2023 and July 2024.
- Following completion of the works HTC commenced a ‘true value’ adjudication for alleged unpaid sums in connection with the works. The adjudicator was appointed following nomination by RICS by virtue of the adjudication provisions in a JCT D&B Sub-contract, which HTC said was the relevant contract for the works and had been executed at a meeting on 26 January 2023, and later circulated by WLP by email in June 2023 (the JCT Sub-contract).
- WLP raised a jurisdictional challenge and argued that the JCT Sub-contract was “not the genuine and binding agreement between the parties” and that it had been “fabricated and altered or misrepresented in a matter which amounts to fraud”. In short, the argument was that the contract pursuant to which the adjudicator had been appointed did not actually exist and therefore the adjudicator had no jurisdiction to act in connection with this dispute.
- The adjudicator determined that he had jurisdiction to continue with the adjudication on the basis of the evidence before him at that time. WLP continued to participate in the adjudication under a reservation of rights and the adjudicator awarded HTC the sum of £2,142,623.35 (plus interest) representing the balance due for the works completed by HTC.
- HTC subsequently attempted to enforce the adjudication award by way of summary judgment in court. WLP resisted enforcement on the basis that the JCT Sub-contract had been drafted for funding purposes only, had never been agreed as the basis of the works, had not been signed by the individuals and on the date as contended by HTC and therefore has never been formed i.e. brought into existence. During the enforcement proceedings, WLP put forward evidence that works were actually carried out under two entirely different contracts between the parties.
Key issues
The full judgment includes lots of interesting detail and discussion around the relevant case law and precedents, but in summary, key issues included the following:
- Did the adjudicator have jurisdiction to decide the dispute if the specific JCT Sub-contract did not exist?
- Did it matter/was it relevant if the JCT Sub-contract did not exist in circumstances where the alternative contracts pleaded by WLP would have resulted in a referral to an adjudicator using the same procedure?
- By pleading alternative contracts on enforcement, which had not been raised or evidenced during the adjudication, was WLP raising a new jurisdictional argument?
What did the court decide?
The court addressed each of these points and commented as follows:
- The existence of the JCT Sub-contract
Was the dispute about the existence of the JCT Subcontract a jurisdictional issue or a substantive issue? If it was jurisdictional, then it would go the heart of whether or not the adjudicator had the power to determinate the dispute, but if it was a substantive issue then it would be within the adjudicator’s power to decide. The court distinguished between “a case where a contract is relied upon but is incorrectly identified in one or more respects, and a case where the contract relied upon never existed…”
The court held that in this case, this was a fundamental dispute as to the very existence of the contract. If WLP was correct, then the contract pursuant to which the adjudicator had been appointed did not exist and therefore the adjudicator could not have been correctly appointed and would have no jurisdiction to decide the dispute. In such a case the court noted that “Providing that the jurisdictional challenge has not been lost, if the defendant's argument in this respect has a real prospect of success, summary judgment is likely to be inappropriate.”
WLP had disputed the existence of the contract during the adjudication and had not waived its rights in that regard. It had also provided substantially more evidence during the enforcement hearing to evidence its alternative arguments on contract formation. In the circumstances, the court found that there was a real prospect that at a full trial WLP could establish that the adjudicator was appointed pursuant to a contract which did not exist.
- Was the existence of the JCT sub-contract relevant when WLP’s alternative pleaded contractual arrangement would have resulted in a referral to an adjudicator using the same procedure as had already been used? I.e. did the answer to point 1 above really matter?
HTC argued that in circumstances where the alternative contracts relied upon by WLP were in any event also construction contracts capable of giving the same adjudicator jurisdiction to decide the same dispute under the same procedure, the dispute about the existence of the particular JCT Sub-contract itself did not undermine the adjudicator’s jurisdiction.
However, the court did not agree. The court held that there must be a “foundational” contract in existence pursuant to which the adjudicator was properly appointed. Variations or changes or the precise terms of that contract could then be a substantive issue for the adjudicator to decide. But only if the adjudicator had been correctly appointed in the first place. That was not the case here, despite the fact that the contractual arrangements contended included the same adjudication procedures. If the JCT Sub-contract pursuant to which the adjudicator had been appointed did not exist, that would be fatal to the adjudicator’s jurisdiction.
- By advancing an alternative contractual argument during the enforcement proceedings which had not been put before the adjudicator, was WLP relying on a new or different argument in respect of jurisdiction?
During the adjudication WLP had simply put forward a position that the JCT Sub-contract did not exist. However, during the enforcement proceedings, WLP argued and put forward evidence that the works had been carried out under two different contracts (neither of which was the JCT Sub-contract). This was an important point, because the authorities are clear that relying on a new jurisdictional argument on enforcement (that was not raised during the adjudication) is not permissible.
The court held that if WLP’s argument was that the adjudicator lacked jurisdiction because the correct contractual position involved more than one construction contract, that would be a new argument (not put before the adjudicator) which could not form the basis for arguing against enforcement at this stage. However, despite the new evidence put forward by WLP during enforcement proceedings, WLP’s argument essentially remained that the JCT Sub-contract did not exist. That was a point which was squarely put before the adjudicator and against which WLP had not waived its rights. Therefore, the court found that this was not a new or different argument in respect of jurisdiction to that which had been raised during the adjudication and WLP was entitled to raise this as a jurisdictional challenge against enforcement.
In the light of the above, summary judgement to enforce the adjudicator’s decision was refused. Given the court’s decision on these points, the court also did not then need to consider the allegations of fraud and misrepresentation made by WLP against HTC in relation to the JCT Sub-contract.
Key takeaways
This case highlights the difficulties which can arise where a formal contract is not agreed and signed by both parties prior to the commencement of construction works. In this case it was not the content of the contract, but rather the existence of the contract that was the key issue. This made the adjudication procedure uncertain and left the notifying party open to a jurisdictional challenge on enforcement, ultimately meaning that it was unable to recover c.£2m of unpaid sums awarded to it by the adjudicator.
So, however urgent the works may be, the clear lesson is that that parties should endeavour to put a formal agreed signed contract in place sooner rather than later, as this will give certainty of both the substantive terms and prevent arguments about the basis of an adjudicator’s appointment in the event of a future dispute.
