ISG gets £1.8m back in payment wrangle

Cladding contractor FK Construction has been told to repay ISG almost £1.8m in the latest twist in a long-running payment dispute.

In May, the Technology & Construction Court (TCC) ordered ISG to comply with an adjudicator’s decision that it should pay FK Construction the sum following a contractual wrangle.

FK took ISG to court after it failed to abide by the adjudicator’s decision in February that the payment should be made in relation to a major warehouse and logistics scheme near Bristol.

ISG engaged FK on a £3.4m roofing and cladding job after being appointed to deliver the £21.8m project for joint venture developer Richardson Barberry in 2021.

A year later, FK issued an application for payment of £1.6m, which ISG refused to pay, instead submitting a Pay Less Notice (PLN).

However, the adjudicator found the PLN was out of time and invalid, directing ISG to pay the sum, with interest, within seven days.

When the company again failed to comply and FK issued enforcement proceedings, ISG argued the sum should be offset against money under dispute between the parties in a separate case relating to the project.

At that point, the TCC ruled that ISG’s challenge “fell at the first hurdle” and there was no case for the offset.

But the court last week reversed that decision on technical grounds, finding that the adjudicator’s decision had been incorrect and there was “no merit” in FK’s arguments.

“For these reasons, it seems to me that ISG is entitled to the declarations it seeks in respect of, and summary judgement for the repayment of, the sum of £1,751,063.70,” said Judge Adrian Williamson KC.

FK Construction has been approached for comment.

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