The Court of Appeal has confirmed that although insolvent parties may refer disputes to adjudication, they will have difficulty enforcing adjudication decisions in all but exceptional circumstances

The Supreme Court has provided much needed clarity on whether an insolvent company can commence its own adjudication.

In the construction industry, insolvencies are an all-too-common occurrence – as are contractual disputes. There has until now been uncertainty about how the two legal regimes operate together where an insolvent party seeks to adjudicate for the sums it believes it is owed. This uncertainty has now been resolved, with the Supreme Court confirming that an insolvent company can bring an adjudication.

The government has extended the restriction on the enforcement of statutory demands until 31 December 2020. The extension from the initial period of 30 September 2020 was introduced by regulations amending the Corporate Insolvency and Governance Act 2020 and will be of application to those in the construction industry.

In the wake of the Supreme Court's ruling that an insolvent company can adjudicate, the TCC have confirmed that there remain high hurdles to the insolvent party enforcing any adjudication decision.