Bitesize know how from the English Courts
Knowledge Counsel London
"A debate about the true nature of the concluded contractual arrangements between the parties may be a debate that influences both the way in which an adjudicator may be seized of jurisdiction and the substance of the money dispute between the parties."
Construction
The High Court refused to order enforcement of an adjudicator’s decision where there was a credible challenge as to the existence of the contract that was said to underpin the adjudicator’s jurisdiction. The contract in question was for construction works carried out by High Tech Construction Ltd (“HTC”) on a residential development owned by WLP Trading & Marketing Limited (“WLP”). Following an adjudication of the dispute WLP was ordered to pay HTC approximately £2m. HTC subsequently sought to enforce that adjudication decision in the High Court. WLP resisted the enforcement on various grounds but most significantly on the question of whether the adjudicator had jurisdiction. There was a fundamental dispute between the parties as to whether a JCT contract was ever formed. The court ruled that this was an “existential” jurisdiction case. WLP had a real prospect of success of demonstrating that the January JCT contract had never existed. In those circumstances the adjudicator will have no jurisdiction at all and his conclusion on the payment sum could not bind the parties, even temporarily. The court refused to order enforcement.
High Tech Construction Ltd v WLP Trading and Marketing Ltd [2026] EWHC 152 (TCC), 30 January 2026
For a more detailed discussion of the case, see our article here.
Commodities
The Commercial Court has found that Trafigura was the victim of a substantial fraudulent scheme devised and implemented by Mr Gupta and the various corporate entities that he controlled (the defendants). The scheme involved purporting to sell to Trafigura cargoes of LME grade nickel which subsequently turned out to be low value or worthless metals such as iron briquettes. False statements and descriptions were given in the shipping and commercial documents. The value of the claim was around US$500m. The court rejected the defendants’ argument that Trafigura was complicit in the fraudulent trades, both as a result of considering the evidence but also the numerous compelling reasons why it would not have been in Trafigura’s commercial interests to participate in such a scheme.
Trafigura Pte Ltd and another v Gupta and others [2026] EWHC 159 (Comm), 30 January 2026
Injunctions
The Technology and Construction Court has declined to grant an injunction against a bank to prevent it making a payment following a demand made against a performance bond in relation to a construction contract. The applicant contractor sought the injunction on the grounds that it was arguable that the demand was non-compliant with the requirements, or the bond was discharged by repudiatory breach of the underlying contract, or nothing was due under the bond. The application failed because the contractor was unable to establish clear evidence of fraud, nor had it joined the employer to the claim to enable it to make wider arguments about lack of entitlement to make the demand. Although unnecessary to dispose of the application, the court considered the claim on the merits and held that they were not strongly arguable.
Insurance – contract interpretation
The Court of Appeal has dismissed an appeal against the lower court decision on the applicable jurisdiction for disputes under reinsurance agreements. The policies comprised of agreements on the Market Reform Contract form (“MRC”) and facultative certificates. The MRC had a clause providing for English governing law and exclusive English court jurisdiction. The certificates provided for New York governing law and New York arbitration. They also contained a confusion clause which said that “RI slip to take precedence over reinsurance certificate in case of confusion”. When losses occurred, the reinsurer refused to indemnify the insurer, who issued proceedings in the English courts. The reinsurer challenged jurisdiction. The Court of Appeal agreed that the clauses were inconsistent as it was not possible to reconcile the English jurisdiction and New York arbitration clauses. The confusion clause applied to ensure that the MRC and therefore the English jurisdiction agreement prevailed. The court rejected arguments that the confusion clause only applied to internal confusion within the certificates and the two clauses could be read together as giving the English court supervisory jurisdiction over the New York arbitration.
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