Background
Octavius Infrastructure Limited, the main contractor for railway works at Chalkwell station, negotiated with specialist lift manufacturer Serapid Limited for the supply and installation of lifts. The parties exchanged draft NEC3 subcontract terms and substantially resolved several commercial and legal issues, while Serapid began procurement and manufacturing. No formal subcontract was executed, negotiations continued, and Serapid later submitted a substantially increased quotation.
After Network Rail selected different lift technology, Octavius informed Serapid that its services were no longer required and denied that any contract existed. Serapid referred the dispute to adjudication, alleging wrongful termination. The adjudicator found that the parties had formed an NEC3 subcontract and awarded Serapid £416,499, plus fees. Octavius paid the adjudicator’s fees but resisted enforcement of the award on the ground that the adjudicator lacked jurisdiction because no contract had been concluded.
The Court’s Holding
The High Court dismissed Serapid’s application for summary judgment. It did not finally decide that no contract existed. Rather, it held that Octavius had a real prospect of establishing at trial that the parties never formed a binding contract, making summary enforcement inappropriate because the existence of a contract went to the adjudicator’s jurisdiction.
The contemporaneous evidence could support a finding that both parties expected a signed agreement before becoming bound. Communications referred to finalising and signing the contract; negotiations continued after June 2025; Serapid reopened the price; and disputed witness evidence remained relevant. The court also rejected Serapid’s alternative reliance on a “simple oral contract” because that case was unpleaded, had not been referred to or decided by the adjudicator, lacked clarity as to essential terms and formation, and depended on contested evidence.
Key Takeaways
- An adjudicator’s decision will not be summarily enforced where the responding party has a realistic prospect of proving that no contract—and therefore no adjudication jurisdiction—existed.
- Substantial agreement on terms and commencement of work do not necessarily establish a binding contract when the parties’ communications objectively indicate that formal execution remains necessary.
- A claimant cannot ordinarily preserve enforcement by advancing a new, unpleaded contractual basis that was neither referred to nor decided in the adjudication.
Why It Matters
The decision illustrates the limits of the courts’ generally robust approach to adjudication enforcement. Errors within an adjudicator’s jurisdiction ordinarily do not prevent enforcement, but a genuine dispute over whether any contract existed at all may require a trial because it concerns the source of that jurisdiction.
Parties beginning performance while negotiations remain unfinished should clearly document whether they intend to be immediately bound, to proceed under an interim arrangement, or to remain uncommitted until formal execution. Ambiguous references to agreed terms, future finalisation, and signature can leave both payment rights and adjudication remedies uncertain.