Alleging fraud in an adjudication? Make sure you get in early!
In the recent case of Grandlane Developments Ltd v Skymist Holdings Ltd  EWHC 747 (TCC) (29 March 2019), the court considered the validity of fraud allegations arising out of adjudication proceedings.
Whilst parties can of course raise allegations of fraud during an adjudication and/or in subsequent enforcement proceedings, such allegations must be raised at the first opportunity and be based on sufficient evidence. Unfortunately, Skymist heeded no such warning and waited until the enforcement proceedings to raise formal allegations in an attempt to stay execution of the order, even though they had suspicions during the adjudication that the amount of Grandlane’s claim was fraudulent.
The court held there was no evidence of fraud, but that in any event, the claim should have been raised during the adjudication. Skymist’s applications to adjourn summary judgment and stay execution were also rejected in a similar vein, as there was insufficient evidence that there was a real risk of dissipation of assets to avoid repayment of the adjudication sum.
Parties should therefore be cautious when raising such arguments in order to resist enforcement, particularly for potentially underhand reasons and when they don’t have the necessary evidence to back them up.
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