1. Can obligations under a Pre-Construction Services Agreement survive into the building contract?

Belong (Construction) Ltd v Seddon Construction Ltd [2026] EHC 1275 (TCC) [Belong (Construction) Ltd v Seddon Construction Ltd [2026] EWHC 1275 (TCC) (28 May 2026)]

 Background

Belong engaged Seddon under a Pre-Construction Services Agreement dated 27 May 2020 (the “PCSA“) in relation to the development of a care home. The PCSA required Seddon to open up, and test existing air sealing works which had been carried out by a previous contractor that had become insolvent.

On 18 December 2020, the parties entered into a JCT Standard Building Contract (With Quantities) 2016 Edition (the “Building Contract“). The Building Contract did not include a clause requiring Seddon to open up and test the existing air-sealing works.

During construction, the Contract Administrator instructed Seddon to undertake additional air-sealing works. Seddon subsequently sought an extension of time in respect of the resulting delay.

The Contract Administrator rejected the application on the basis that the delay stemmed from Seddon’s earlier failure to comply with its obligations under the PCSA to inspect and test the existing air-sealing works. Seddon argued that, while the obligation existed under the PCSA, it was omitted from the final Building Contract and therefore could not be relied upon. In support, Seddon relied on clause 2.3 of the PCSA: “2.3. On the execution and completion of the Contract, the parties’ respective rights and liabilities in respect of all matters with which this agreement is concerned (including any design performed or any work carried out or order placed under Clause 4.3) shall be subsumed into and be subject to the Contract“.

Seddon contended that this provision effectively extinguished any liability arising under the PCSA once the Building Contract was executed.

The dispute was referred to adjudication. The adjudicator agreed with Seddon, concluding that the relevant PCSA obligation had been superseded by the Building Contract and therefore could not be used to defeat Seddon’s entitlement to an extension of time.

Belong commenced Part 8 proceedings seeking the court’s interpretation of the contractual provisions.

Judgment

The key issue was the proper interpretation of clause 2.3 of the PCSA and, in particular, the meaning of the words “rights and liabilities” and “subsumed into”.

Seddon argued that, once the Building Contract was executed, liabilities arising under the PCSA ceased to exist. Belong on the other hand argued that clause 2.3 merely made those liabilities subject to the Building Contract rather than extinguishing them altogether.

The court found in Belong’s favour.

Applying the distinction between primary and secondary obligations established in Photo Production Ltd v Securicor Transport Ltd [1980] AC 827, the court held that:

• The reference to “liabilities” encompassed surviving liabilities arising from breaches of the PCSA committed before execution of the Building Contract.
• The parties’ primary obligations under the PCSA came to an end when the Building Contract was entered into, but liabilities for earlier breaches continued to exist.
• The phrase “subsumed into” did not mean that the PCSA ceased to have effect for all purposes. Rather, those liabilities were carried forward into, and became subject to, the regime established by the Building Contract.
• The Building Contract provision stating that the PCSA could not override or modify the Building Contract did not impact Seddon’s liability. Preserving liability for pre-contract breaches did not alter the terms of the Building Contract itself.

The court considered that, had the parties intended all rights and liabilities arising under the PCSA to be extinguished upon execution of the Building Contract, they could have used clear language to achieve that result. The court also found support for this interpretation in clause 16 of the PCSA, which contemplated legal proceedings being commenced under the PCSA long after execution of the Building Contract.

The court also disagreed with the adjudicator’s interpretation of clauses 2.28.6.5 and 4.20.3 of the Building Contract. It held that references to an “error, omission, negligence or default” were not confined to breaches of the Building Contract itself. Given the close relationship between the two agreements, those provisions were capable of extending to breaches committed under the PCSA.

Takeaway points

The decision serves as a reminder that entering into a building contract does not automatically extinguish liabilities arising under a preceding PCSA. Unless the contract expressly states otherwise, liability for breaches committed during the PCSA phase may survive and continue to have consequences during the construction phase.

The case also highlights the importance of carefully reviewing transition provisions between PCSAs and subsequent building contracts. Parties should not assume that obligations omitted from the final building contract are necessarily irrelevant if they were breached before the building contract was executed.

2. Did an adjudicator breach natural justice by deciding a dispute on a basis neither party advanced?

Premier Modular Ltd v Maistone and Turnbridge Wells NHS Trust [2026] EWHC 1404 (TCC) [Premier Modular Ltd v Maidstone And Tunbridge Wells NHS Trust [2026] EWHC 1404 (TCC) (10 June 2026)]

Background

PML sought to enforce an adjudicator’s decision relating to entitlement for compensation events under an amended NEC4 Option A contract (the “Building Contract“) with Maidstone and Tunbridge Wells NHS Trust (“the Trust“) for the design and construction of a theatre block at Maidstone Hospital.

The dispute arose from PML’s contention that it required a permanent mains water supply by 30 October 2023 for testing and commissioning purposes, which the Trust did not provide until 20 February 2024.

It was common ground between the parties that:

• the only Accepted Programme under the Building Contract contained no obligation on the Trust to provide a water supply by any particular date; and
• the original Accepted Programme had not been updated.

PML referred the dispute to adjudication. During the adjudication, as part of clarification put to the parties, the Adjudicator referred to compensation event 60.1(3) (which wasn’t relied on by either party), and asked “Is the revised programme Contract Programme Rev2 dated 14 July 2023 an Accepted Programme?”.

The parties’ responses confirmed that the Accepted Programme had not been updated, and neither party made any submissions regarding Clause 60.1(3).

The adjudicator concluded that the Accepted Programme had been updated, and PML was entitled to a compensation event under Clause 60.1(3).

The Trust did not make payment and PML subsequently applied to enforce the adjudicator’s decision. The Trust resisted enforcement on natural justice grounds.

Judgment

The Trust argued that:

• The adjudicator’s principal finding, namely that a compensation event had occurred, was based on a contractual provision that neither party had relied upon during the adjudication. While PML’s case was that compensation events had arisen under clauses 60.1(1), 60.1(14) and 60.1(18) of the Building Contract, the adjudicator concluded instead that a compensation event had occurred under clause 60.1(3).
• The adjudicator failed to determine one of its key defences, namely that PML’s claim was time-barred because it had not notified the alleged compensation event in accordance with the contractual notification requirements.
• The adjudicator’s finding that the Accepted Programme had been updated was not an issue that had formed part of the dispute referred to adjudication and was inconsistent with the parties’ common position that there was no updated Accepted Programme.

PML argued that:

• the dispute had been referred in sufficiently broad terms to permit the adjudicator to consider any compensation event under clause 60.1; and
• the adjudicator’s clarification questions had given the parties sufficient opportunity to address the potential relevance of clause 60.1(3).

The court rejected PML’s submissions and held that the adjudicator had breached the rules of natural justice, therefore dismissing PML’s application to enforce the adjudication.

Applying the principles from Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2006] BLR 15 and Roe Brickwork Ltd v Wates Construction Ltd [2013] EWHC 3417 (TCC),  the court held that an adjudicator must not determine a dispute on a factual or legal basis which has not been argued by the parties without first giving them an opportunity to comment on it.

The court found that the adjudicator had decided the central issue on a basis that was not advanced by either party, was directly contrary to the parties’ common position on the status of the Accepted Programme and had not been fairly canvassed during the adjudication process.

The court concluded that the adjudicator had gone “off on a frolic” by inventing a case for PML which PML itself had not advanced and which the Trust had no proper opportunity to address.

Takeaway points

Whilst the courts continue to emphasise the high threshold for resisting enforcement on natural justice grounds, this case demonstrates that adjudicators must ensure parties have a fair opportunity to address any factual or legal basis on which a dispute may be decided.

An adjudicator is not confined to choosing between the parties’ competing arguments. However, where they intend to determine a dispute on a different basis, that issue must first be put to the parties for submissions. Failure to do so may render the decision unenforceable.

3.The importance of knowing what parties have actually agreed in relation to an extension of time before commencing an adjudication.

Clerkenwell Lifestyle (UK) Limited v HG Construction Limited [2026] EWHC 1406 (TCC) [Clerkenwell Lifestyle (UK) Ltd v HG Construction Ltd [2026] EWHC 1406 (TCC) (12 June 2026)]

 Factual Background

The dispute arose from the design and construction of a new 153-room hotel and nine affordable apartments in Clerkenwell, London under an amended JCT Design and Build Contract 2016. The works were divided into two sections with separate completion dates. During the project, HG claimed entitlement to extensions of time arising from a number of delay events, including Covid-related disruption, transport strikes and adverse weather.

Following discussions between the parties and the Employer’s Agent, HG was granted a 12-week extension of time in February 2023. Further extensions were subsequently granted, revising the sectional completion dates to August and September 2023. However, sectional completion was not achieved until significantly later. Clerkenwell consequently sought to recover substantial liquidated damages and referred the dispute to adjudication.

In the adjudication, Clerkenwell argued that HG was not entitled to any further extension of time beyond those already awarded. HG contended that it was entitled to additional extensions of time and alternatively argued that time had become “at large”. Following a detailed review of expert delay evidence, the adjudicator awarded HG some additional extension of time but nevertheless found that Clerkenwell remained entitled to recover liquidated damages of approximately £955,000.

After the decision was issued, HG argued for the first time that an exchange of emails in February 2023 constituted a binding agreement between the parties fixing revised completion dates. HG claimed that the adjudicator had failed to take this agreement into account and that the decision was therefore unenforceable due to jurisdictional error and a breach of natural justice.

Judgment

The court rejected HG’s challenge and enforced the adjudicator’s decision finding that the alleged binding agreement defence had not been properly advanced during the adjudication. While HG had referred to the February 2023 email correspondence during the adjudication, it had not clearly argued that those emails created a standalone contractual agreement fixing revised completion dates. The court found that an adjudicator cannot be criticised for failing to determine a defence that was never properly put before them.

The court also rejected HG’s argument that the February 2023 emails themselves created a binding agreement. Looking at the exchanges in their full context, the court concluded that the parties were simply operating the contractual extension of time machinery rather than entering into a separate settlement agreement. The references to matters being “agreed” reflected agreement as to how the contractual mechanism would be applied, not an intention to create a new and independent contractual arrangement.

The court further observed that HG’s own expert evidence had been prepared on the basis of the original programme and contractual completion dates, which was inconsistent with its later argument that revised completion dates had already been fixed by agreement. The court therefore found that there had been no breach of natural justice and no jurisdictional error.

Takeaway points

The case serves as a reminder that parties must clearly articulate all substantive defences during an adjudication. A party will face significant difficulty resisting enforcement where it seeks to rely on arguments that were not expressly advanced before the adjudicator.

The judgment also highlights the importance of ensuring consistency between legal submissions and expert evidence. HG’s later reliance on an alleged agreement fixing revised completion dates was undermined by the delay analysis relied upon by HG in the adjudication, which proceeded on an entirely different basis.

More broadly, the decision reinforces the courts’ continued reluctance to interfere with adjudicators’ decisions save in clear cases of jurisdictional error or material breach of natural justice. Mere disagreement with the adjudicator’s reasoning or outcome will not prevent enforcement.

Finally, the judgment demonstrates the risks of relying on informal correspondence as evidence of a binding contractual variation or settlement. If parties intend to vary completion dates or compromise claims outside the contractual mechanisms, clear and unequivocal documentation will usually be required

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