Blockbuster blow: High Court (again) orders enforcement of an adjudication decision made in an insolvent company’s favour

The case of Laing O'Rourke Delivery Limited v Shepperton Studios Limited [2026] EWHC 612 (TCC) is another instance where the Technology and Construction Court has allowed an insolvent company, Laing O’Rourke Delivery Limited (LOR), to enforce an adjudication decision made in its favour (in this case, against Shepperton Studios) so long as suitable measures are put in place to allow the award to be recouped by the paying party upon final determination.

Background

The claim involved a dispute between the parties over an interim payment application. LOR (the contractor) issued the application, for £5,627,275.11 to Shepperton (the employer), and Shepperton responded with:

• A payment notice confirming they intended to pay £2,420,516.84 of LOR’s notified sum; and
• A payless notice confirming they were applying a total of £2,428,514.47 in further deductions to the (already reduced) sum in the interim payment notice. 

The effect of these two notices was that nothing was due to LOR in respect of its application.

LOR subsequently commenced an adjudication on this dispute. The adjudicator found that Shepperton’s payment notice was invalid as it had failed to provide a breakdown for how the notified sum was reached, as was required by the contract. He also found the payless notice was invalid as it adopted the notified sum in the (invalid) payment notice as a starting point. He awarded LOR the full sum claimed in its payment application.

Enforcement proceedings

LOR subsequently sought to enforce the adjudication decision via the TCC’s expedited summary judgment process. Shepperton raised both substantive and procedural arguments to resist this. This included arguments about the validity of its notices, and also a request that:

‘There should be a stay [of execution] on any sums payable. LOR is insolvent. LOR now continues to trade only by the support, continued from time to time, of its parent.’

This was requested due to Shepperton’s concern that, if it paid the sum awarded by the adjudicator and then was successful in any final determination of the payment dispute (e.g. court proceedings), it would not be able to recover the sums paid to LOR due to LOR’s insolvency. This is a common concern for those facing adjudication enforcement proceedings brought by insolvent parties.

The Court’s decision

The judge granted summary judgment in LOR’s favour for £3,198,660.64. This was the difference between the £5,627,275.11 sought by LOR and the deductions identified in Shepperton’s payless notice.

In terms of the requested stay of execution, the judge appeared to accept that LOR was in financial difficulty and, as a result, a stay was the correct starting position (Wimbledon v Vago [2005] EWHC 1086 (TCC)). However, the Court felt able to depart from this position because Shepperton had received a:

This meant that Shepperton could call on LOR’s parent company to repay the sums paid to LOR in the event it succeeded at the final determination stage. The Court therefore declined to order a stay.

Discussion 

Whilst this decision is well worth a read for the points it makes about payment, from an enforcement perspective:

• This case is further confirmation from the TCC that a party with a favourable adjudication decision may be able to enforce that decision, notwithstanding its insolvency, so long as suitable measures are put in place to protect the paying party’s ability to obtain final determination of the underlying dispute and recover the sums paid if this goes in its favour; and 
• Parent guarantees can now be added to the list of security options that can be offered (alongside ring-fencing arrangements, after the event policies, etc.) to paying parties by those looking to enforce adjudication decisions on behalf of insolvent companies.

This is not to say, however, that a parent guarantee will be sufficient in every case. It seems that few submissions were made by Shepperton as to the suitability of the guarantee and, as a result, the Court accepted it was sufficient. This case provides a reminder to those facing adjudication enforcement proceedings by insolvent companies to properly scrutinise and challenge the suitability of any security provisions. If the paying party can show the security proposed is inadequate, a court is less likely to depart from the starting position in Wimbledon.