The High Court has exercised its discretion against ordering a stay of proceedings that had been commenced in breach of a clause which obliged the parties to refer any disputes to an out-of-court adjudication process, as a pre-condition to commencing litigation. Because the litigation involved other parties and wider issues regarding the project, the court considered that an adjudication involving only two parties would be of little utility and that a stay would unjustifiably disrupt the proceedings: Lancashire Schools SPC Phase 2 Ltd v Lendlease Construction (Europe) Ltd [2024] EWHC 37 (TCC).
This decision contrasts with the recent Court of Appeal decision in Children’s Ark Partnerships Ltd v Kajima Construction Europe (UK) Ltd [2023] EWCA Civ 292 (discussed here) which confirmed that the usual order, where a party has failed to comply with a valid ADR clause, is to grant a stay for the ADR process to be undertaken.
For more information, see this post on our ADR Notes blog.
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