Recent jurisdictional challenges in statutory adjudication: who is a ‘party’?

Two recent High Court cases, Paragon Group Limited v FK Facades Limited [2026] EWHC 78 (TCC)¹ (Paragon) and Darchem Engineering Limited v Bouygues Travaux Publics another company [2026] EWHC 220 (TCC)² (Darchem) respectively considered whether an assignee to the original contract and an individual party to a subcontract were considered a ‘party’ for the purposes of the relevant contracts, so as to entitle them to refer disputes to adjudication in accordance with the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996) and Part 1 of the Scheme for Construction Contracts (the Scheme). Interestingly, the courts reached opposite conclusions on the question of who constituted a ‘party’, providing useful commentary in respect of foundational principles of contractual construction in the context of the statutory adjudication regime. 

1. Paragon Group Limited v FK Facades Limited

On 17 October 2017, Office Depot International (UK) Limited, the original employer, entered into a contract with FK Facades Limited (FK) for remedial works in respect of a roof installation at a commercial property in Greater Manchester. This contract was subsequently assigned to OT Group Ltd in 2021 and further assigned to Paragon Group Limited (Paragon), the claimant in these proceedings, in 2024. Paragon considered that FK was culpable for delay to the project and was successful upon referring this dispute to adjudication. FK adopted various jurisdictional points, opposing the enforcement of the adjudicator’s decision.

The High Court ultimately held that Paragon was entitled to summary judgment of the adjudicator’s decision, dismissing FK’s submission that the adjudicator did not have jurisdiction to decide the dispute. They argued that in accordance with the Scheme, only a ‘party to a construction contract is permitted to refer a dispute to adjudication. Paragon, as an assignee to the contract was not a ‘party’ to the contract and as such could not refer the dispute pursuant to the Scheme.

The court acknowledged that, as there was no authority directly on point, an analysis of the existing case law was “at best, of marginal assistance”. Rather, the court was required to return to first principles of contractual construction to resolve the “essential issue”: whether Paragon, as an assignee to the original building contract, was a ‘party’ within the meaning of the contract.

The court concluded that Paragon was a ‘party’ and thereby entitled to refer a dispute to adjudication. The court rejected FK’s argument that ‘party’ was to be interpreted as being restricted to those parties named in the original building contract in order to achieve consistency with the references to ‘party’ throughout the Scheme. Rather, the court concluded that the references to ‘party’ throughout the Scheme were “essentially neutral”, such that including assignees within the meaning of ‘party’ “[would not] do violence to the wording of the Scheme”.

The court then turned to consider who is a ‘party’ for the purposes of the contract. The court emphasised the that the contract was to be read as a whole and in light of “an assumed knowledge of the general law of contract and assignment”, including that the legal consequence of assignment is that the assignee generally has “all of the rights and remedies passing at law with the rights assigned”. Further, the court weighed up the “practical consequences of the rival interpretations [of ‘party]”: despite agreeing that potential difficulties arose in relation to confidentiality regarding adjudication decisions, the court considered that there was no “immediate injustice” resulting from an assignee being permitted to commence adjudication proceedings, as, in practice, an original contracting party in FK’s position could assert and rely upon such a claim in defence to the assignee’s claim, and it would not prevent FK from commencing its own adjudication against the original contracting party.

Further, the court noted that as adjudication intends to be a “swift, adverse cost-free, and only temporarily binding dispute resolution mechanism”, the risk of inconsistent findings between adjudicators is “not obviously a major problem”, as any inconsistency can be corrected by litigation in due course. In any event, the court considered that parties can always include express wording to preclude an assignee from commencing adjudication proceedings.

Therefore, despite finding the point “finely balanced”, the court was ultimately satisfied that the “objective interpretation” of the contract was that an assignee was a ‘party’ for the purpose of the contract and that the adjudicator therefore had jurisdiction to decide a dispute referred to them by Paragon. FK has been granted permission to appeal to the Court of Appeal on the basis that there was no direct authority on the point and that the analysis was finely balanced.

2. Darchem Engineering Limited v Bouygues Travaux Publics another company

In contrast, the High Court in this case reached an opposing conclusion and held that an individual party to a joint venture (JV) was not, by itself, a ‘party’ to the contract and was thereby not entitled to refer a dispute to adjudication in its own right.

The underlying dispute concerned a subcontract between two joint venture companies: Bouygues Travaux publics and Laing O’Rourke (together BYLOR) (the Main Contractor) and Darchem and Framatome Ltd (together, EDEL) (the Subcontractor), in which BYLOR contracted for various construction works for the Hinkley Point C nuclear power station in Somerset (the Subcontract). A dispute arose between the parties and Darchem referred the dispute to adjudication on the basis that it was entitled to so as a party to the subcontract.

Darchem commenced three adjudications, each of which was challenged on the basis that Darchem was not a party to the Subcontract and was therefore not entitled to refer a dispute to adjudication. The third of these adjudications is the subject of the current enforcement proceedings.

As in Paragon, BYLOR challenged the enforcement of an adjudicator’s decision on the basis that Darchem, being an individual party to the JV, was not a ‘party’ on a proper construction of the adjudication clause in the Subcontract. While the courts reinforced that it adopts a robust approach to adjudication enforcement, the ultimate task for the court was to ascertain the parties’ objective intention when reading the contract as a whole. The court ultimately concluded that the better construction of the Subcontract was that Darchem, as an individual party to the JV, was not a ‘party’ for the purposes of the adjudication provision in the contract. The court considered that, on balance, the contract contained “numerous linguistic markers” consistent with the contractual use of ‘party’ referring to only two parties: although the contract enabled each of the parties to the JV to act ‘jointly and severally’ and that each entity took on joint and several liability with its partner for the liabilities of the JV, the contract lacked specific reference to the particular party in the adjudication clause and did not provide for any contractual guidance in that regard, thereby causing operational “chaos” if all individual parties to the JVs were entitled to refer disputes to adjudication . As such, the court dismissed Darchem’s summary judgment application for enforcement of the adjudicator’s decision.

However, interestingly, the court made no reference to the Paragon judgment and did not engage in an analysis of the references to ‘party’ in the statutory adjudication framework.

Conclusion

The High Court’s opposing conclusions on a near-identical issue in these cases elicit helpful insight into the court’s approach in construing construction contracts in the context of statutory adjudication. The courts’ reasoning in these cases demonstrates that contractual construction is a fact-sensitive exercise to ascertain the parties’ objective intention in each case. Albeit framed in the context of identifying the parties’ objective intention in each case, these comparative judgments are useful in highlighting the practical and policy implications of differing factual circumstances – specifically, in respect of where the referring party is an assignee of the original contract as compared with an individual entity in a JV agreement – in the context of statutory adjudication. This, coupled with FK being granted permission to appeal to the Court of Appeal in Paragon demonstrates that this issue is far from settled. The next instalment is eagerly awaited.

The Birketts view

These cases offer helpful reminders to parties when constructing their contracts and considering whether to pursue adjudication proceedings.

• The court adopts a robust approach to adjudication enforcement.
• Foundational principles of contractual construction require the court to ascertain the parties’ objective intention, which will involve an analysis of the contract as a whole.
• Careful drafting of the contract to reflect parties’ intention is paramount.
• Although the court may consider the practical implications of their interpretation of the contract, the essential question concerns the proper construction of the contract.