Clerkenwell Lifestyle (UK) Ltd v HG Construction Ltd [2026] EWHC 1406 (TCC) serves as a poignant reinforcement of the ‘pay now, argue later’ philosophy that underpins the TCC’s approach to adjudication enforcement. HG’s primary contention was that an agreement reached via email had irrevocably revised the contractual completion dates and the adjudicator’s decision was reached in excess of jurisdiction and in breach of natural justice. Ultimately, the Court disagreed.

Factual Background

In December 2021, Clerkenwell engaged HG under an amended JCT Design and Build Contract 2016 to build a 153-room hotel and nine affordable apartments, located near Mount Pleasant, London. Throughout 2022, HG reported delays and the Employer’s Agent (‘EA’) expressed skepticism regarding HG’s entitlement to a 12-week EOT. Nevertheless, Clerkenwell expressed a willingness to grant a 12-week extension, leading to the controversial correspondence of February 2023.

On 8 February 2023, the EA issued a “final proposal” including a 12-week EOT. HG confirmed agreement that afternoon and, on 9 February 2023, the EA issued a formal Notification of Extension of Time. This notice stated it was issued “in accordance with clause 2.25 of the Building Contract” and cited specific Relevant Events: “exceptionally adverse weather condition (clause 2.26.8) and strikes (clause 2.26.11)”. The covering letter noted the EOT was “subject to” the 8 February email, creating a nexus that HG later claimed transformed the contractual mechanism into a free-standing settlement.

Adjudication Proceedings

In the Referral Notice, Clerkenwell sought a declaration that HG was liable for LADs, totalling £1,161,770. The adjudicator awarded EOTs of 186 days for one section and 123 days for another. He calculated these by adding the delay to the original 2021 completion dates, rather than the revised dates HG claimed were settled. This resulted in a net payment of £955,943.43 to Clerkenwell.

HG subsequently requested the adjudicator correct a slip arguing that he had no jurisdiction to set aside the February 2023 ‘settlement’ and that using the original dates was a clerical error. The adjudicator’s response on 8 January 2025 was definitive: “I accept that the revised completion dates were derived from adding the extent of critical delay… to the original dates for completion. I confirm that was intentional.”

Natural Justice and Jurisdictional Challenges

HG argued the adjudicator deliberately failed to consider its “binding agreement” defence. The Court rejected this on two primary grounds. Firstly, it found that HG never actually raised the binding agreement as a substantive defence during the adjudication, but that HG mentioned the February correspondence only in the context of a different argument regarding whether time was at large.

Secondly, and most strikingly, HG’s own delay expert conducted a holistic analysis where he used the original contract baseline programme to measure delays from the outset of the project. By doing so, HG’s expert evidence fundamentally contradicted the “line in the sand” settlement defence. The Court held that an adjudicator cannot be in breach of natural justice for adopting a methodology that was used by both parties’ experts during the proceedings.

Substantive Contract Law

The Court deconstructed the February 2023 emails to determine if they met the requirements for a free-standing contract. HG argued that the use of the word ‘agree’ construed a binding settlement and the 12 weeks were granted regardless of Relevant Events. However, the Court found that: (i) ‘agree’ indicated a willingness to operate the Clause 2.25 mechanism, not a new contract; (ii) the notice was issued “in accordance with clause 2.25” citing weather/strikes as the basis for the EOT; and (iii) the agreement was complex and lacking certainty.

The Court also addressed subsequent conduct. While usually inadmissible for interpretation, subsequent conduct is an established exception used as evidence of whether a contract exists. The fact that HG and its experts proceeded to analyse delay from the 2021 inception—rather than treating the February 2023 dates as an immutable starting point—proved that no binding settlement was intended.

The Court also addressed whether the EA even had the authority to vary the contract. Article 3 stated that the EA has the authority to act for the Employer “under any of the Conditions.” HG argued that varying the completion dates was “reasonably incidental” to an agent’s functions. The Court disagreed, and relying on Hudson on Building & Engineering Contracts: “[The] architect or engineer has no implied authority to make a contract or depart from the concluded contract.” Further, HG submitted that the proposals put forward by the EA were ones made by Clerkenwell and were simply being communicated by the EA. The Court was equally unpersuaded.

Key Takeaways

Align Expert Strategy with Pleadings: Meticulously instruct delay experts. If pleading a ‘line in the sand’ settlement, the expert cannot submit a holistic analysis measured from the project’s inception. Such contradictory methodologies render the settlement defense unsustainable.

Clarity in Settlement Correspondence: To supersede existing contractual provisions, settlement language must be unequivocally certain. Linking an EOT to existing contractual mechanisms (like Clause 2.25) undermines the objective intention to create a distinct, free-standing legal relationship.

Jurisdictional Timeliness is Absolute: In the TCC, a defense not expressly raised in the Response essentially does not exist for the purposes of a subsequent natural justice challenge. A party cannot attempt to use the slip rule to retrofit a substantive jurisdictional defense.