Case Law

Eco World – Valleymore Embassy Gardens Company Limited v Dobler UK Limited [2021] EWHV 2207 (TCC) Judgment of the TCC 3 August 2021

Facts: C completed two blocks, and E has taken possession. The third block was delayed, and therefore E applies LD. No provision in the contract to reduce LD in case of partial completion.

Issue: C argued that E can not apply the contract LD rate for the 3rd blocks and shall apply the proportionated LD rate only to the delayed 3rd block.

Held:

* Should the proportionate only block 3? No, LD shall apply until the contractor reaches the PC for the whole of the contract.

* Is the amount an LD or a penalty? - LD rate reflect the parties intention, and it’s not a penalty

Note: There are no such issues with FIDIC contracts as FIDIC has a provision to proportionate the LD in such circumstances.

Red Book 1999- 18.2 – “…….If a Taking-Over Certificate has been issued for a part of the Works (other than a Section), the delay damages thereafter for completion of the remainder of the Works shall be reduced. ……”

QScartoons-LD

 

Is written instruction a condition precedent?

Russell v. Viscount Sa da Bandeira (1862) 143 ER 59

Rusell, a London based shipbuilder was contracted to construct a warship by the Portuguese government. Also, the government employed Admiral Sir. George Rose Sartorius to oversee the work. The scope of work was very general (e.g. it use the words 'as usually supplied', 'in a manner similar to' father providing specific details)

Contracts provide that the contractor is not entitled to get paid for extra work/variations unless those were instructed in writing by the Admiral.

The issue was whether the contractor is entitled to get paid for extra work/variations, as they were not instructed in writing by the Admiral.

Court held:

* The clause was clear and shall give full effect

* “….(contractor) might have declined to comply with these requests unless they were made in written”