Factual Background
The dispute arose from a construction contract dated 17 October 2018 (“Agreement”), between Office Depot International (UK) Limited (“Employer”) and FK Facades Limited (“Contractor/Defendant”) for remedial roofing works at a commercial property in Ashton Moss, Greater Manchester. The Agreement was based on the JCT Minor Works Building Contract 2016, as amended. Clause 3.1 in unamended form restricted assignment without the consent of the other party, however, in the Agreement, the said stipulation was deleted and the Agreement permitted the Employer to assign the “benefit” of this Agreement while requiring the Contractor to obtain consent of the Employer. For dispute resolution, Article 6 and Clause 7.2 provided disputes to be referred to adjudication, applying the Scheme for Construction Contracts pursuant to Section 108 of the Housing Grants, Construction and Regeneration Act 1996, with the English courts retaining jurisdiction.
Following two statutory assignments, each pursuant to Section 136 of the Law of Property Act 1925, first to OT Group Ltd in 2021, and subsequently to Paragon Group Limited (“Claimant”) in 2024, the benefit of the Employer’s rights vested in the Claimant finally.
Dispute arose after Claimant alleged delay and treated the Agreement as terminated in April 2025, advancing a claim for Liquidated Damages. Defendant disputed liability and objected when Claimant referred the matter to adjudication under the Scheme for Construction Contracts. It maintained that the Claimant, as an assignee, could not invoke Adjudication under Section 108 of the Housing Grants, Construction and Regeneration Act 1996. The Adjudicator, through non-binding ruling, rejected the jurisdictional objection and awarded Claimant a sum of £80,500 towards claim and reimbursement of fees of Adjudicator amounting to £17,787 (“Ruling”).
Defendant did not comply with the Ruling, following which Claimant commenced present adjudication summary enforcement proceedings in the Technology and Construction Court.
Issue and Decision
Whether or not the Claimant (Paragon) was legally entitled to refer its claim as assignee against the Defendant Contractor (FK) to adjudication.
Claimant argued that, by virtue of the statutory assignment under Section 136 of the Law of Property Act 1925, the Claimant had stepped into the Employer’s position and the Claimant was assigned not only legal right to the things in action [Section 136(1)(a)] but also legal and other remedies for the same [Section 136(1)(b)]. It contended that the right to adjudicate formed part of the assigned benefit, particularly as the Contract did not exclude or restrict its transfer. The Claimant argued that a wholistic and proper interpretation of the Contract, would lead to a conclusion that “Party” includes the assignee of the Employer.
Defendant submitted that since the Agreement defines Party as the Employer or the Contractor and the Scheme only gives right to adjudicate to a party to the Contract, thus Claimant who was not a party could not refer disputes to adjudication. In this regard, Defendant relied on Bexhill UK Ltd. vs Razzaq[1] which holds that an assignee can become party to the Contract only through novation. The Defendant further added that that the right to adjudicate under Section 108 and the Scheme for Construction Contracts applies only to a “party” to the construction contract, and that an assignee does not become such a party without novation. It contended that Claimant’s claim arose from the assignment, not from the Agreement, thus it could not invoke adjudication rights under Agreement which extended only to “disputes or differences arising under the contract ”.
The Defendant further highlighted various issues that arises if assignee is given right to adjudication against an original party such as the original party cannot bring counterclaim against the assignee, whether the findings in such adjudication would be binding against the assignor and if not so, then it will risk inconsistent findings.
The Court rejected the Defendant’s narrow reading of the term “Party”. It held that the reference to ‘party’ or ‘parties’ in the Scheme are neutral and does not only mean original parties to a contract. The Court supported this reasoning from the fact that various connotations of the party such as ‘parties to the Contract’, ‘parties’ and ‘parties to the dispute’ has been used in the Scheme without distinction, hence the drafters did not have any intent to differentiate between the original contracting party and assignee for the purposes of adjudication under the Scheme for Construction Contracts (¶ 55-59).
The Court further held that the primary contractual provision governing adjudication was Article 6, which permits Parties identified as the Employer or the Contractor to refer disputes to adjudication. However, this clause must be read together with the amended assignment clause under Article 3.1. On issue, whether Claimant had become party under Article 6, the Court held that while an assignee does not become a party to the contract in the same way as under novation, since only a novation transfers both the benefits and burdens of the contract; however, an assignee under a valid statutory assignment acquires legal rights as well as associated remedies for the same, unless the same are expressly or by necessary implication excluded. Thus, an assignee is entitled to invoke the adjudication mechanism in the same manner as the original contracting party (¶ 60-63).
The Court also rejected the argument that Claimant’s claim arose under the assignment and not under the Agreement. It held that once the contractual rights have been validly assigned, any claim brought by the assignee is necessarily a claim arising under the Agreement because the assignee can enforce only those contractual rights that were transferred to it (¶79).
The Court rejected the Respondent’s argument that practical difficulties prevent an assignee from commencing adjudication. Although it accepted that certain complications may arise, it held that these concerns do not outweigh the assignee’s right to enforce the assigned contractual rights. The Court observed that while the Defendant may not be able to bring a counterclaim directly against the assignee, it can still rely on all contractual and equitable defences available against the original contracting party. In any event, counterclaims are generally not permitted in adjudication proceedings.
The Court also dismissed concerns that separate adjudications involving the assignor and assignee could result in inconsistent findings. It reasoned that adjudication is only an interim dispute resolution mechanism, and any inconsistency can ultimately be resolved in litigation. Furthermore, the Defendant remains free to pursue its own claims against the original contracting party. In practice, the Court noted, such difficulties are unlikely to arise because assignees commonly agree to indemnify the assignor and assume responsibility for conducting disputes arising after the assignment. Lastly, parties who wish to avoid these issues can expressly prohibit assignments or exclude an assignee’s right to adjudicate through contractual terms.
Accordingly, the Court held that the practical objections to allowing an assignee to adjudicate are largely theoretical and do not justify restricting that right (¶64-77).
In view of the above, the Court concluded that the Claimant is entitled to a summary judgment.
Significance
The judgment spells out that, if the benefit of a construction contract is assigned, the right to adjudicate will normally go with it unless that right is clearly carved out. It leaves less scope for arguments that an assignee cannot adjudicate simply because it was not an original party to the contract, and it fits with the TCC’s general willingness to uphold adjudicators’ decisions. For buyers, funders and group companies, it is a practical reassurance that an assignee can run an adjudication in its own name without needing the original employer to stand in front.
Case Details
Citation Codes: [2026] EWHC 78 (TCC)
Date of Judgment: 20 January 2026
Forum: England and Wales High Court, Business and Property Courts (Technology and Construction Court)
Bench: HHJ Stephen Davies (sitting as a High Court Judge)
Link to the Judgment
[1] [2012] EWCA Civ 1376
Author(s)
Laasya Sarojini
Student at Jindal Global Law School