Can Payment Under A Construction Contract Be Linked To A VAT Invoice?

In the recent decision in Lidl Great Britain Limited v Closed Circuit Cooling Limited t/a 3CL [2023] EWHC 2243 (TCC) the TCC has given useful guidance on whether the Final Date for Payment can be linked to the provision of a valid VAT invoice.

The case concerned an application by 3CL to enforce an adjudicator's decision in its favour, under which the adjudicator ordered Lidl to pay 3CL the sum of £781,986.22. 3CL had previously applied for payment of this sum in accordance with a framework agreement between the parties. However, Lidl issued a notice valuing the sum due to 3CL as nil, and refused to pay on the basis that:

1. 3CLs payment application did not satisfy the requirements of the framework agreement and so was invalid; and