Potential Insolvency Brings Stay of Payment

Normally, when a building dispute arises that leads to an adjudicator making an award in favour of one party, the award is simply paid and that is that. However, sometimes things are more complicated.



Recently, a company went to the High Court arguing that it should not have to pay an adjudicator’s award in favour of another company because it had counterclaims to pursue against that company and, critically, a winding up petition had been issued against the other company. It argued that it would be unfair for it to have to pay the sum decided by the adjudicator to a company which might be insolvent.



The Court refused to pre-judge the fate of the winding up petition but, since the company had not contributed to the potential insolvency of the other company, ordered that the payment should be ‘stayed’ until the outcome of the insolvency proceedings was known.