A failure to consider cross-claims in adjudication amounts to a breach of natural justice (Morganstone v Birkemp)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

Construction analysis: This case concerned an adjudication decision, whereby the adjudicator decided that £207,076.00 was due from Morganstone to Birkemp Ltd upon Birkemp’s interim payment application. Birkemp sought to raise cross-claims in its defence in the adjudication, but the adjudicator held that these fell outside of his jurisdiction. Morganstone subsequently issued a Part 8 claim seeking declarations that the adjudication decision was wrong in law and unenforceable, and Birkemp issued a Part 7 Claim seeking enforcement of the award, which was transferred to be dealt with at the same time as the Part 8 Claim. The Judge declined to grant the declaratory relief sought by Morganstone, but also declined to enforce the adjudication award. It was held that the Adjudicator had breached the rules of natural justice due to the failure to consider Birkemp’s cross-claim. Written by Georgia Whiting, legal counsel at Ardmore.