By Stephen Radcliffe, Carly Thorpe, Lucy Wild
The recent judgement in Michael J Lonsdale (Electrical) Limited v Bresco Electrical Services Limited (In Liquidation)  EWHC 2043 (TCC) makes clear that a company in liquidation cannot refer a dispute to adjudication when that dispute includes (whether in whole or in part) determination of any claim for further sums said to be due to the referring party from the responding party.
In this landmark case, it was held that a company in liquidation cannot refer a dispute to adjudication because, at the date of liquidation, all claims and cross-claims cease to be capable of separate enforcement. All disputed amounts arising from a contract between a company and a creditor become replaced with a single debt, upon the appointment of the liquidator, which must be taken account of by operation of the Insolvency (England and Wales) Rules 2016.
Mr Justice Fraser ruled that an adjudicator does not have the jurisdiction to conduct this account and so, such claims cannot be referred to adjudication.
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