UK Construction and Law
An employer enforces a 1.6m pounds adjudication award on a London industrial scheme as the contractor fails to prove it cannot pay or be funded
By Staff Writer | 25 October 2026
LUC Construction asked the Technology and Construction Court to stay enforcement of a notified sum award in favour of Avanton Capital CC, a single purpose development company. The judge refused, holding that the contractor had not proved probable inability to repay and had given no evidence of what its shareholders could provide.
Mr Justice Constable gave judgment on 15 October 2026 in Avanton Capital CC Ltd v LUC Construction Ltd [2026] EWHC 2630 (TCC). LUC had been engaged under a design and build contract made on or about 15 November 2023 to build three industrial units at Culvert Court, London. Practical completion was certified on 10 April 2025, and disputes followed over the final account.
Eight adjudications on one account
On 22 May 2026 LUC started seven adjudications on different parts of the value dispute, before seven different adjudicators. On 13 June 2026 Avanton started its own, alleging that LUC had served no valid payment notice or pay less notice against a notified sum of 1,877,640.25 pounds. Between 24 June and 10 July 2026 three of LUC's adjudicators decided that contra charges in the final account were overstated by 710,264 pounds in total. On 9 July 2026 the decision in Avanton's adjudication required LUC to pay the notified sum with interest. The remaining adjudicators then resigned.
LUC abandoned its natural justice defence before the hearing, so summary judgment was not opposed. Judgment was entered for 1,603,500.25 pounds plus interest, after setting off 184,140 pounds owed to LUC under a separate decision, together with 13,742 pounds for the adjudicator's fees. The contest was LUC's application for a stay of execution under CPR 83.7(4).
The employer's means
Avanton is a single purpose vehicle set up to develop Culvert Court. Leaving the award out of account and treating a shareholder loan as a liability, as its counsel conceded it should be, its management accounts showed negative equity of 1,656,758 pounds. The judge accepted that it had little cash and relied on discretionary group funding. Its ultimate parent had filed net assets of 9,427,350 pounds at 31 July 2025, and substantial group support had been given during the development.
The absence of present cash is not determinative. The relevant question is whether, at the conclusion of the arbitration, Avanton would probably lack access to resources from the development, refinancing, realisation or group support sufficient to meet any repayment liability.
Mr Justice Constable, Technology and Construction Court
LUC had not proved probable inability to repay. Even if it had, the deterioration in Avanton's accounts reflected the structure LUC knowingly accepted when it contracted with a development vehicle, which pointed against a stay.
The judge also set out when a defendant's own inability to pay may support a stay. It will be rare, and the court will ordinarily want to be satisfied that no realistic source of funding exists from owners, associated persons or external funders. Where the risks on each side are finely balanced, the court should favour enforcement. LUC, with turnover above 14m pounds, conceded it could not pay without raising funds, but gave no evidence about the finances of its 50 per cent shareholder or any other source. That gap was fatal.
A paying party that pleads its own impecuniosity must prove that its shareholders and associates cannot fund the payment, not simply assert it.
The arbitration over the true value of the account continues, with LUC paying first and arguing afterwards.