Background

Project One London (“POL”) and VMA Services (“VMA”) entered into a subcontract in October 2023 for mechanical works valued at £387,696.36.

Following POL’s referral of a true‑value dispute regarding Application for Payment No. 8 (“AFP8”), the adjudicator determined in September 2025 that VMA must repay £102,656.67 to POL.

The enforcement of that award was subsequently challenged by VMA on three grounds involving alleged breaches of natural justice.

Key Issues Raised by VMA

VMA resisted enforcement on three grounds:

1. The Adjudicator Raised an Issue Not Advanced by Either Party (Air Conditioning Pipework)

VMA argued the adjudicator took into account possible defects in air‑conditioning pipework without giving the parties a chance to address this point.

2. Failure to Consider Undisputed Evidence

VMA contended that the adjudicator ignored clear evidence of:

• the actual cost of a water tank, and
• VMA’s testing costs,
  replacing this with unsupported “guesswork”.

3. Arbitrary Percentage Reductions

They argued that “blanket” or “arbitrary” reductions of 20% and 50% applied to several valuation items were unfair and unsupported.

Court’s Analysis of the Key Issues

1. Alleged “Frolic of His Own”: Air Conditioning Adjustments

VMA’s central argument was that the adjudicator impermissibly introduced the idea of pipework defects into the air‑conditioning valuation without prior argument. However, the court held that:

• The adjudicator had already made detailed findings about defective pipework in the water services section of the award.
• That issue was fully ‘ventilated’ by both parties.
• Applying similar reasoning to air‑conditioning was within the “rough and ready” approach permitted in adjudication.

The court emphasised that adjudicators are entitled to draw logical inferences from evidence before them and “do the best they can” with imperfect information.

Outcome: No breach of natural justice.

2. Alleged Failure to Consider Undisputed Evidence

Water Tank Valuation

VMA asserted that the adjudicator ignored the actual cost of the tank. The court disagreed, noting:

• Even if the adjudicator misunderstood or overlooked evidence, this is not a basis to resist enforcement.
• Natural justice requires a deliberate failure to consider evidence — not an inadvertent error — and no such intention was shown by the adjudicator.

Testing Costs

VMA alleged the adjudicator wrongly valued testing works at nil. The court held that the adjudicator was entitled to conclude that no supporting evidence was provided. Misinterpretation of evidence is not a breach of natural‑justice.

Outcome: These issues amounted at most to alleged errors of fact — not breaches of natural justice.

3. Alleged “Arbitrary” Reductions of 20–50%

VMA argued percentage reductions to items such as sanitaryware and pipework were “arbitrary”. The court observed:

• Adjudicators are permitted, indeed expected, to make approximate valuations under time pressure.
• The adjudicator’s use of the word “arbitrary” simply reflected the approximate nature of his assessment, not unfairness.

The court rejected the reliance on public‑law concepts of arbitrariness, noting that adjudicators do not exercise state power.

Outcome: Reductions were legitimate exercises of judgment.

Materiality of Any Alleged Breaches

Even if VMA had established errors, the court held that none were material — meaning none went to the heart of the dispute or would have significantly altered the outcome.

The adjudicator’s task in this case was to assess the true value of an interim payment application — a process that is, by its nature, quick, approximate, and subject to later adjustment. Because interim valuations are revisited monthly and revisable at final account, the exercise is inherently rough and ready.

Against that backdrop, none of VMA’s three complaints were considered material. Even if the adjudicator had accepted VMA’s points, the overall valuation could still reasonably fall within a broad range without undermining natural justice. The disputed items were only part of a wider set of thirteen assessments, and there was no single “correct” answer.

Accordingly, the court held this was not a case where enforcement should be refused. VMA had a fair opportunity to present its case, and the adjudicator acted within the wide, imprecise discretion appropriate for interim payment disputes. No central or decisive unfairness had occurred.

Conclusion of the Court

The court firmly rejected all three natural‑justice allegations:

• No issue was introduced that the parties lacked an opportunity to address.

• No evidence was deliberately ignored.

• Percentage reductions were permissible and expected within adjudication.

As a result:

POL was entitled to enforcement of the adjudicator’s award in full.

The judgment concluded by noting that VMA’s challenge resembled the type of post‑hoc scrutiny discouraged by the courts — combing the adjudicator’s reasoning to find minor alleged errors. Which are then mischaracterised as breaches of natural justice.

Why This Case Matters

This decision serves as a strong reminder that:

• The TCC remains highly supportive of adjudication, particularly its rough‑and‑ready nature.
• Only deliberate, material breaches of natural justice will justify refusing enforcement.

It reinforces the principle from Carillion v Devonport that adjudication is intended to ensure cash flow and temporary resolution of disputes, not perfect accuracy — a principle firmly upheld here.

How can we support you?

If you have any queries in respect of this summary article or would like to know more about what I do at Novus Resolve, please contact me at: neil.forte@novusresolve.com