STAY OF COURT PROCEEDINGS PENDING ADJUDICATION

DGT Steel and Cladding Ltd v Cubitt Building and Interiors Ltd [2007] EWHC 1584 (TCC); [2007] All ER (D) 43 (July)

In DGT Steel and Cladding Ltd v Cubitt Building and Interiors Ltd [2007] EWHC 1584 (TCC); [2007] All ER (D) 43 (July) Judge Coulson QC held that the court has an inherent jurisdiction to stay court proceedings issued in breach of an agreement to submit a dispute to adjudication and that, where the parties have entered into a binding adjudication agreement, the burden is upon the party seeking to resist the stay to justify its stance. On the facts he held that there was no good reason for the court not to exercise its inherent jurisdiction to stay the proceedings. Judge Coulson also observed that the right to refer a dispute to adjudication under s108 of the Housing Grants, Construction and Regeneration Act 1996 (hereafter ‘the 1996 Act’) is a right that is conferred upon both parties to a construction contract. It follows from this that, where a party to a construction contract does not submit a dispute to adjudication as agreed but seeks to start court proceedings, the other party to the contract may be entitled to a stay on the basis that its right to have the dispute referred to adjudication is being denied.