The adjudicator cannot decide a case the parties did not argue: LMND v John Henry
Natural justice arguments in adjudication enforcement are, by design, difficult to run. The UK (and South African) courts have consistently said so, and the authorities stack up against them. In Carillion, Chadwick LJ made plain that such arguments succeed only in the plainest of cases. Fraser J in Beumer put it in the bluntest possible terms: they should be raised only where the proceedings were obviously unfair. These propositions are now settled law. Which makes it notable that the Manchester TCC, in LMND Group Limited v John Henry Group Limited, an unreported judgement, refused enforcement on precisely that ground.
The case arose from a framework agreement concluded between the parties in May 2023 for the provision of subcontract services. Works were carried out under two work directions and completed in 2024. By October 2025, a series of five adjudications had been brought, with this being the most recent. The adjudicator, decided in favour of LMND. John Henry sought to resist enforcement on two natural justice grounds: first, that the adjudicator had decided the estoppel defence it raised on a basis advanced by neither party; and second, that the adjudicator had failed to decide a further defence that approximately £209,000 had already been paid and should have been credited against any liability. The court refused enforcement on the first ground. The second ground failed.
The adjudicator introduced new authority – and never gave the parties a chance to address it
John Henry’s response in the adjudication pleaded an estoppel by convention: LMND had accepted 120 payment certificates over the course of the works without raising the deficiencies it now relied upon to challenge those same certificates in the adjudication. In support, John Henry cited three recent TCC decisions in which that argument had succeeded. LMND chose not to serve a reply. The adjudicator therefore had before him only John Henry’s case on the estoppel.
The adjudicator dismissed the defence. He did so by reference to the requirements of the sub-contract, which went to the validity of the payment notices, not to the estoppel argument and then by invoking the decision in Spencer v MW High Tech Projects Limited, in which it was held that a common misunderstanding of the applicability of the Construction Act could not create an estoppel by convention. The problem was threefold. The Spencer authority was not cited by either side. The argument derived from it, viz., that a common misunderstanding as to what the payment notices required could not give rise to an estoppel by convention, was not advanced by either side. Lastly, and most importantly, the adjudicator did not invite submissions on either. The court accepted LMND’s concession at the enforcement hearing that the adjudicator’s basis for dismissing the estoppel was wrong in law.
HHJ Stephen Davies confirmed that this constituted a serious breach of natural justice. Adjudicators do possess inquisitorial powers: they are entitled to go beyond the parties’ submissions and to draw on authority neither side has cited. The problem here was not that the adjudicator had done so. The problem was that having introduced the Spencer authority and derived from it a new line of reasoning on the estoppel, he was obliged to put that material to the parties so they could address it – and he did not. The breach lay in depriving them of the opportunity to engage, not in the act of looking beyond their submissions in the first place. The question then was materiality.
Materiality: Could the estoppel have succeeded?
Following Corebuild, a breach of natural justice will not lead to non-enforcement if the point in question was always hopeless – that is, if the court can conclude that the answer the adjudicator arrived at was so obviously correct that the failure to ventilate the point properly could not have made a difference. LMND attempted to persuade the court that the estoppel was always bound to fail. It pointed to a non-waiver clause in both the framework agreement and the sub-contract conditions, and to two more recent authorities. The judge was unpersuaded.
What this means for in-house counsel
Two features of this case are unusual, and both were material to the outcome. First, LMND did not serve a reply in the adjudication. That is not inherently wrong – there is no obligation to reply, but it created the specific procedural vacuum into which the adjudicator stepped. Had LMND engaged with the estoppel authorities cited by John Henry, the adjudicator would have had adversarial submissions to work with, and the risk of him introducing his own analysis would have been substantially reduced. The decision not to serve a reply in an adjudication where a substantive legal defence has been pleaded with authority always carries a risk.
The broader lesson is not that natural justice arguments have become easier to run. They have not. The courts remain hostile to them, and the authorities confirm that adjudicators operate under real-time pressures that make procedural perfection unrealistic. Adjudicators also retain inquisitorial powers and may properly go beyond what the parties have put before them. But those powers are not unconditional. Where an adjudicator introduces new authority or a new line of reasoning that is material to the outcome, natural justice requires that the parties be given an opportunity to address it before the decision is made. That obligation was not met here. The defence was substantive, the point was credible, and the failure to invite submissions on it was sufficient to render the decision unenforceable. That is not a high bar – it is a basic procedural floor. This case fell through it.
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