Against natural justice – Premier Modular Limited v Maidstone and Tunbridge Wells NHS Trust [2026] EWHC 1404 (TCC)

In recent adjudication enforcement proceedings, the TCC declined to enforce an adjudicator’s award on natural justice grounds. A natural justice defence rarely succeeds and so a successful use of the grounds is worthy of note.

Law on breach of natural justice

The TCC summarised the law on breach of natural justice by referring to the authority of Cantillon Ltd v Urvasco Ltd [2008] B.L.R. 250, where Akenhead J said a breach of natural justice must exist a material issue where the adjudicator goes off “on a frolic of his own” and decides a case on a factual or legal basis not advanced by either party without giving the parties an opportunity to comment.

The facts

Premier Modular Limited (PML) and Maidstone and Tunbridge Wells NHS Trust (the NHS Trust) entered into an NEC4 Option A contract for a new operating theatre.

PML asserted the NHS Trust was responsible for the mains water and there was a delay to works caused by the NHS Trust not sorting this out.

The NHS Trust agreed they were responsible for the mains water but said it was not bound by timelines.

There was an accepted programme at appendix 3 of the contract which both sides agreed was not updated.

PML wrote to the NHS Trust saying a compensation event had arisen and sought an extension of time and adjustment of the price under the contract.

The NHS Trust responded saying PML did not use the contractual mechanism for notifying a compensation event within 8 weeks of the event having took place and so there could be no adjustment of time and the price may not be adjusted.

PML commenced an adjudication, and the parties started the adjudication on an agreed position that the accepted programme was at appendix 3 of the contract and if a compensation event arose it arose under clause 60.1(1), 60.1(14) and/or 60.1(18) of the contract.

After mutual exchange of submissions the adjudicator asked whether the programme was revised. Both parties said no and that issue was not in dispute.

The adjudicator also asked about the necessity of an early warning notification when claiming a compensation event. Both parties said an early warning notification was not a prerequisite to a compensation event.

The adjudicator then decided, contrary to the submissions of either party, that the accepted programme was in fact revised but the parties did not follow contractual procedures for revision of a programme. Crucially the alleged revised programme included a date for completion of the mains water supply. Therefore, the adjudicator concluded, a compensation event arose under 60.1(3) because the NHS Trust did not provide something it should have provided. It was a simple as that in the adjudicator’s view.

The enforcement proceedings

PML, presumably content with the adjudicator’s award in its favour, sought to enforce the adjudicator’s award in the TCC in the usual way. The NHS Trust opposed enforcement on natural justice grounds.

There were 3 grounds that the NHS Trust relied on to argue that the adjudicator’s decision breached natural justice:

1. The adjudicator’s central finding that there was a compensation event, was made on a contractual basis that had not been argued by either party.
2. The adjudicator failed to address one of the NHS Trust’s defences to the compensation event claim, namely that PML failed to comply with a condition precent and as such was not entitled to any benefits it may have been able to receive for a compensation event (should one have arisen).
3. The adjudicator made a finding that the accepted programme of works had been updated. This was not part of the adjudication, entirely contrary to the position of both parties, and was central to adjudicator’s finding.

The TCC dealt with grounds 1 & 3 together and held that the adjudicator went off on a frolic of his own by deciding a key point on a factual or legal basis that had not been argued or put forward in the submissions made to adjudicator: neither party argued that a compensation event arose under clause 60.1(3), nor did any party argue that the accepted programme had been revised.

The TCC then turning to ground 2 found that the adjudicator either misunderstood or was confused about the contractual mechanisms for Early Warnings but this was not a breach of natural justice.

The TCC therefore refused to enforce the adjudicator’s award against the NHS Trust on the basis of a breach of natural justice relying only on grounds 1 & 3 in reaching this decision.

This case is a helpful reminder of the high bar the court requires to be met in order to consider a breach of natural justice defence.

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