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. ……”