An application was recently made to restrain notice being given of a winding-up petition which sought payment of some £820,000 following an adjudicator's decision in respect of goods supplied and services rendered for the development and conversion of Victory House. The adjudicator had rejected Victory House's argument that it was not liable to pay the sum identified in the interim application because the parties had entered into a memorandum of understanding which provided for other payments to be made.
Pennsylvania's intermediate appellate court has affirmed a defence verdict for the design and construction manager of a major league baseball stadium. The court issued its ruling following extensive discovery and motions practice, a six-week bench trial in 2010 and two defence verdicts. The case has a number of key takeaways for complex, multi-party cases.
Proving waiver of a party's contractual right to arbitrate has often been a laborious obligation of the party bearing such burden. In the case between Legoland and Superior Builders, the court of appeals concluded that Legoland's actions in Superior's suit did not substantially invoke the judicial process; therefore, Superior failed to carry its heavy burden to show that Legoland had waived its contractual right to arbitrate. Accordingly, the court compelled the parties' dispute to arbitration pursuant to their arbitration agreement.
CBUK and Sarens recently sought a determination, following an adjudicator's decision, of a dispute over the terms and interpretation of a subcontract. Sarens had been engaged by CBUK to provide cranes and other equipment for the installation of six bridges along the M6 link road. CBUK had been engaged as subcontractor to Costain under a modified NEC3 contract. The dispute was about what, if anything, CBUK and Sarens had agreed about the provision of liquidated damages.
Malaysia witnessed considerable developments in statutory adjudication case law in 2017, probably due to the increasing use of this form of dispute resolution mechanism by stakeholders in the construction industry. This update examines some of the significant decisions that were handed down by the Malaysian courts in 2017 and their impact on statutory adjudication under the Construction Industry Payment and Adjudication Act.
Construction delay claims are regarded as being among the most difficult types of claim in the industry, due in large part to the difficulty in analysing the home office overhead costs associated with a specific project in conjunction with the percentage of the total amount of these costs for the company. It is important for a contractor to select a recognised methodology for calculating allocable home office overhead costs and ensure that all elements tied to such damages methodology are satisfied.
After Gosvenor agreed to perform certain cladding works for Aygun, disputes arose and Gosvenor applied to enforce an adjudicator's decision. Aygun accepted that adjudicators' decisions will be enforced by the courts, regardless of errors of fact or law, but alleged fraud on the part of Gosvenor, stating that "a substantial proportion" of the adjudication award had been based on sums which were fraudulently invoiced. However, no allegations of fraud had been raised in the adjudication proceedings.
The International Federation of Consulting Engineers (FIDIC) Contracts Committee recently unveiled the much-anticipated new suite of rainbow contracts, with the publication of amended Red, Yellow and Silver Books. The changes reflect only some of the key amendments introduced by the revised 2017 FIDIC contracts. Nevertheless, the changes are significant and it will undoubtedly take time for contracting parties to become familiar with the revised contracts.
The Supreme Court recently found the well-established regime of registered employment agreements to be unconstitutional. Uncertainty regarding the level of protection for wages and benefits of workers in the construction sector followed this decision, but has now been addressed by the Sectoral Employment Order (Construction Sector) 2017 and the Sectoral Employment Order (Mechanical Engineering Building Services Contracting Sector) 2018.
In 2014 OSI and Lagan entered into a contract for the design and construction of a new production facility. During the course of the contract, OSI's agent issued certain instructions and in July 2016 OSI gave notice to Lagan that it was in default in failing to comply with four of these instructions. OSI said that Lagan did not remedy the default and accordingly gave notice of termination. In a preliminary hearing, Lagan held that two of the contract instructions had been invalid.
In a recent judgment in an ongoing dispute about the quality of steel monopiles at an offshore wind farm, a judge had to consider claims for overhead and profit. The plaintiff had claimed a percentage for overheads at a rate of 4%, which the judge was reluctant to accept. While the judge suspected that the plaintiff may well have incurred increased overhead costs as a result of breaches of contract, he was not prepared "to pluck a figure out of the air".
The insolvency of Carillion has placed into sharp relief the difficulties faced by those both up and down the contractual chain for a construction project when one part of that chain becomes insolvent and the ultimate supplier of goods and materials on site has not been paid. There are a number of key considerations parties need to bear in mind if they are unfortunate enough to be faced with a Carillion-type situation and need an answer to the question: who owns those goods?
The Supreme Court has for the first time interpreted the provisions on the pricing of change orders in the most widely used Swiss standard form contract, the SIA Norm 118. But the decision also has wider ramifications for Swiss law construction contracts. It makes clear that it should be assumed that parties to a lump-sum contract intended to contractually regulate the effect on the contract price of a unilateral change order, even if the terms of the contract are ambiguous.
The Court of Appeal recently considered whether a pay-when-paid clause in a construction contract is void under the Construction Industry Payment and Adjudication Act. It found that pay-when-paid clauses under a construction contract drawn up before the enactment of the Construction Industry Payment and Adjudication Act will remain valid and not be affected by the introduction of Section 35, which prohibits any conditional payment clauses in construction contracts.
A recent judgment has provided an important clarification in relation to the issue of 'smash and grab' adjudications and will likely be welcomed by the construction industry. Contrary to previous judgments, the court held that it is possible for a paying party to adjudicate on the 'true value' of an interim application in circumstances where no payment or pay less notices were given and there has been a successful smash and grab adjudication.
Construction lawyers are frequently called on to draft or interpret extension of time clauses. But the questions of what should be in these clauses, and why they are typically included in construction contracts in the first place, receive little attention. When drafting an extension of time clause, parties will want to carefully consider whether and how to address a number of specific issues.
The Federal Court recently dealt with three broad issues under the Construction Industry Payment and Adjudication Act – namely, jurisdictional challenge, the exclusion of defences and the setting aside and staying of decisions. The decision has broad repercussions for the way that adjudications are conducted in Malaysia.
Swiss courts and arbitrators have addressed the interface between force majeure clauses and regulatory changes, and how they impact on the contractor's entitlements. Clauses addressing unforeseen circumstances will be construed in line with the parties' actual intentions. If they cannot be established from the text and surrounding circumstances and evidence, the tribunal will construe the clause objectively, regarding how it can be understood in good faith.
Employers should keep a watchful eye on contractor variations and ensure that they do not modify any important quality or original requirements specified in the contract. Whatever the length of the contract, the employer is duty bound to notify any deviation from the contract on final inspection. However, the courts will not protect a contractor which has fraudulently concealed a defect or prevented the employer from discovering a defect.
Anyone watching what has happened recently in Houston and Florida will immediately think about the safety and wellbeing of those affected by Hurricanes Harvey and Irma. Once the aftermath of destruction is assessed, both areas and their residents will be looking at a long road to recovery. Among the many coming challenges, owners and contractors of existing projects must take steps to assess the effects and identify their contractual rights and obligations.