A court judgment on 22nd February 2021 in favour of the claimant in the case of Motacus Constructions Limited -v- Paolo Castelli SpA has reinforced the importance of adjudication as a dispute resolution forum in the construction industry, including when contracts are subject to a foreign law and jurisdiction clause.
In handing down judgment His Honour Judge Hodge QC set a legal precedent for the construction industry, determining that the inclusion of an exclusive jurisdiction clause in favour of a foreign court within a construction contract for works in England did not preclude the English court from enforcing an adjudication award.
The case revolved around a case brought by a London-based construction business Motacus Constructions Limited against Italian design company Paolo Castelli SpA in relation to fit-out works in a London hotel.
Motacus had undertaken the work on a subcontract that was subject to the laws of Italy but which also contained a provision that all disputes were to be submitted to the exclusive jurisdiction of the Courts of Paris, France.
The adjudicator awarded £450,000 plus VAT and interest, which Paolo Castelli failed to pay. Motacus therefore began fast-track adjudication enforcement proceedings in the High Court. The enforcement proceedings were defended by Paolo Castelli. The sole defence was that the English courts did not have jurisdiction to enforce the adjudicator’s award because of the exclusive jurisdiction clause in favour of the courts of Paris, France.
HHJ Hodge QC rejected that defence and granted summary judgment for Motacus, enforcing the adjudication award on the basis that adjudication represented an interim measure of protection within Article 7 of the 2005 Hague Convention.
Advising Motacus, the Hill Dickinson legal team consisted of David Rintoul, David Oram and Sam Beer, while Jennifer Jones of Atkin Chambers represented Motacus at the High Court enforcement proceedings.
Commenting on the case outcome, David Rintoul said: “In essence, the issue before the court was whether a contracting party can seek to sidestep adjudication as a dispute resolution mechanism through use of foreign jurisdiction clauses. It will be a relief to the UK construction sector that the cashflow benefits of adjudication have been protected by the judgement. In this regard, an important legal precedent has been set.”
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