Adjudication, dormant companies and stay of execution

WRB (NI) Ltd v Henry Construction Projects Ltd [2023] EWHC 278 (TCC)

In WRB (NI) Ltd v Henry Construction Projects Ltd [2023] EWHC 278 (TCC), Pepperall J held that the claimant was entitled to summary judgment in order to enforce the decision of an adjudicator. He held that the defendant was not entitled to a stay of execution despite the fact that he found that it was probable that the claimant, a dormant company, would be unable to repay the judgment sum should the defendant subsequently succeed on its cross-claim against the claimant. The principal reason for not granting a stay was that the defendant had chosen to enter into a contract with a newly formed dormant company whose financial position had not changed since the date of entry into the contract. The case highlights the risks that attend entry into a contract with a party in a financially vulnerable position and that vulnerability will not ordinarily entitle a party to a stay of execution, unless the financial vulnerability has increased significantly since the date of entry into the contract.