Summary

Three sets of proceedings seek the cost of replacing cladding on 18 high rise buildings, put at about £90 million in total. The developers bringing them are remediating the buildings and want the money back from those behind the external wall insulation system.

The English supplier is in administration and the claims against it are stayed, so the developers turned to two German companies: the manufacturer that owns it, and a non-trading entity holding shares for the Stotmeister family. Both applied to set aside service out of the jurisdiction.

Mr Justice Moody dismissed the applications and decided nothing about liability. He held that the developers have a real prospect of success under section 149 of the Building Safety Act 2022 and in contribution, and that the argument over whether the Act reaches a German company begins at the wrong end.

Background and facts

The claimants are developers in the Barratt Redrow and Lendlease groups. They inspected developments after the Grenfell Tower fire and say they found defective cladding. The works are funded in the first instance through the Building Safety Fund, but the developers say the liability falls on them.

Sto Limited is in administration after its German owner petitioned the Scottish court to wind it up in December 2024. The second defendant is the German manufacturer that bought all its shares in 2004. The third is a German entity holding family shares which, on its own evidence, has never manufactured or supplied anything.

The case on the product turns on the 1995 and 2007 certificates, which the developers say described the system as national class 0 while saying nothing about whether it resists fire spreading over a wall.

The issue

The German defendants took three lines: that permission to serve out had never covered the section 149 claim; that neither that claim nor the contribution claims had a real prospect of success; and that the Act cannot bite on a company domiciled in Germany.

The developers answered that the witness statement supporting the application to serve out had foreshadowed the section 149 claim, that the points taken against them were fact sensitive and belonged at trial, and that extra-territoriality was beside the point because an applicable law analysis produces English law.

The decision

On permission, the judge read the claim form and the supporting witness statement together and objectively, and held that a claim under section 149 against the German manufacturer was sufficiently identified there. Had he been wrong, he would have let it proceed anyway.

On the substance of section 149, he began with the authorities.

there has, to date, been no case which has considered the tests set out in section 149 and so this is a novel and untested area of law.Mr Justice Moody, paragraph 42

That drove the answer. The attack rested on assertions about what the German company had and had not done.

I am to observe judicial restraint and not to conduct a mini-trial. I should proceed on the basis that facts alleged in the Particulars of Claim are true, and I should not be drawn into an evaluation of the weight of the evidence.Mr Justice Moody, paragraph 45

He found a real prospect of success on each of the three routes in section 149(2): failure to comply with a cladding product requirement, a misleading statement by a person who markets or supplies the product, and manufacture of a product that is inherently defective.

On contribution, the defendants argued that a claimant cannot issue before it has paid, been ordered to pay or agreed to pay. Whether payment had been made was ruled out of scope, but the judge answered the principle.

I can see no logical reason why a claimant should have to wait until it has paid or been ordered to pay the underlying sum before claiming contribution, but a defendant need not do so; indeed that may be procedurally very inconvenient.Mr Justice Moody, paragraph 60

On reaching the German shareholder through a building liability order under section 130, he held that the defendants had started in the wrong place.

I am satisfied that (per Lord Sumption) the correct approach in this case would be to start with an applicable law analysis, and only then to ask whether there is a mandatory rule of the forum which displaces the applicable law identified by this process.Mr Justice Moody, paragraph 79

The construction industry is international. The Grenfell Tower Inquiry established that foreign companies could be responsible for building defects identified in England.Mr Justice Moody, paragraph 81

The disposal is procedural and much was left open. Several challenges to the contribution claims were ruled out of scope and may be renewed on a strike out or summary judgment application. On time for service, the judge found no good reason for the extension, but the defendants had conceded that in a compromise.

The applications to set aside service out of the jurisdiction are dismissed.Mr Justice Moody, paragraph 108

Practical implications

Section 149 has not been construed by any court, and this judgment does not construe it. What it settles is where that will happen: at trial, or on a strike out where the facts are not in dispute.

The reach of the Act into a foreign group is harder to resist after this. Where English law is the applicable law, the presumption against extra-territorial effect does not arise at all, and section 131 defines association by control without asking where the associate is incorporated.

A developer remediating at its own cost need not wait for the final bill before claiming contribution.

HB (WM) Limited & Ors v Sto Limited & Ors [2026] EWHC 1833 (TCC). Technology and Construction Court (KBD), Business and Property Courts of England and Wales. Mr Justice Moody. Hearing 12 to 14 May 2026. Approved judgment; no hand-down date appears on its face. Case references HT-2024-000441, HT-2024-000439 and HT-2024-000433.