Advanced Control Systems, Inc. v Efacec Engenharia E Sistemas SA

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
JudgeMrs Justice Jefford
Judgment Date12 February 2021
Neutral Citation[2021] EWHC 573 (TCC)
Docket NumberHT-2020-000176
Date12 February 2021

[2021] EWHC 573 (TCC)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

TECHNOLOGY AND CONSTRUCTION COURT (QBD)

The Rolls Building

7 Rolls Buildings

Fetter Lane

London EC4A 1NL

Before:

Mrs Justice Jefford

HT-2020-000176

Between:
Advanced Control Systems, Inc
Claimant
and
Efacec Engenharia E Sistemas SA
Defendant

Mr S Oram (instructed by ONTIER LLP) appeared on behalf of the Claimant

Mr G Shirazi (instructed by Penningtons Manches Cooper LLP) appeared on behalf of the Defendant

Mrs Justice Jefford
1

This is an application by the claimant (“ACS”) to strike out a number of paragraphs of the defendant's Defence and Counterclaim, namely paragraphs 25 to 65, 72 to 74 and 76 to 81. Alternatively there is an application for full and proper responses to a Part 18 Request dated 15 September 2020, albeit accompanied by a repetition of the application for paragraphs to be struck out.

Background

2

The background to this matter is a project in Bangalore, India, to improve the electrical power distribution system in that city. The defendant, Efacec, was the main contractor in respect of package 1 of these works. The employer was the Bangalore Electricity Supply Company (“BESCOM”). Package 1 compromised a computer system, the Distribution Automation System (“the DAS”), to receive and monitor inputs from switches and inputs across the network and provide real-time observation of the state of the network and then, through the distribution management system, issue commands to operate the network. It was to be controlled from two physical control centres and the package also included a communications system which linked the two control systems and other parts of the system and network.

3

From March 2014, the claimant, ACS was a subcontractor to Efacec in respect of the DAS part of those works. There is a background in which ACS had formerly been part of the corporate structure of the defendant, but that matter is not material to the issues that arise on this application.

Pleadings

4

The claimant's claim is for the payment of substantial sums of money which it says remain outstanding on this project, those sums amounting to approximately $1.7 million. The Defence and Counterclaim was served on 4 September 2020.

5

The structure of the Defence and Counterclaim is relevant to this application. Section A sets out an overview of the case and the parties. Section B sets out the project and the subcontract provisions. Section C is then headed “The claimant's poor performance and repeated breaches of the project”. By way of example only, section C.1 covers the period March 2014 to December 2016. At paragraph 25 it is alleged:

“Throughout this period, the Claimant failed adequately to resource the project with sufficient or sufficiently competent staff, to properly coordinate or manage its staff, adequately to interface with BESCOM, to progress the project or to comply with the project schedule. The documentary and software deliverables produced by the Claimant were late and of a low quality, with more errors and omissions than would be expected of competently produced documents and software. Further, the Claimant failed adequately to interface with, or gather requirements from, the BESCOM staff that were undertaking OJT [on-the-job training] with the consequence that the Claimant's development work contained a number of business process errors that would not be caught until later in the project.”

That is very much a basket pleading with all manner of allegations of inadequacies on the part of the claimant thrown into the basket.

6

Paragraph 26 becomes a little more specific and alleges that the claimant was due to submit its factory acceptance testing (“FAT”) procedures on 24 June 2014; that it was late; that when the procedures were produced they were of low quality and did not comply with the technical specifications, or did not address project-specific requirements or did not sufficiently demonstrate system compliance; and that the document failed to explain the testing in sufficient detail that the procedures could be adequately understood for the purposes of implementation. It is alleged that BESCOM sent the claimant its comments on the procedures and instructions to resubmit compliant procedures.

7

As the pleading continues in respect of this and later periods, there are similar specific allegations that relate to particular documents or testing procedures or deliverables under the subcontract. Most, if not all, of them are, however, framed in similar terms without any condescension to particularity of the respects in which, to take paragraph 26 as an example, there was non-compliance with the technical specification or insufficiency in the test procedure.

8

The more general paragraph 25 that I have already recited appears in similar terms at further points throughout the defence, for example, at paragraph 38, where the same allegation is made in respect of a further period of the project. I do not propose to recite the whole of the defence for the purposes of this judgment, but that is in broad terms the structure of the way in which the defence is pleaded, with a narrative covering the whole period of the project and, at appropriate junctures or at the start of particular periods, that sort of basket allegation is made and then some further detail of the matters that might have been put into the basket is set out.

9

The defendant's case as to the claimant's claims for payment is set out in section F. It is denied the sums claimed are due. In part in defence to payment it is alleged that there was a change in the basis of payment from “pay when paid” to “pay in any event”, if I can put it that way, but that that was brought about by economic duress.

10

The Counterclaim then repeats the entirety of the Defence. It then alleges, at section G, breaches by the claimant. Paragraph 90 states:

“Throughout the project, the Claimant was in breach of its contractual obligations under the subcontract. The Claimant had failed to achieve Milestones on time, failed to deliver a contractually compliant system, failed to deliver the required training and failed to perform the subcontract with reasonable care and skill.”

Particulars of breach are purportedly set out at paragraphs 90.1 to 90.16. In each instance, however, the particulars are essentially a simple assertion that the claimant failed to do something (for example, adequately to resource the project or to produce project documents with reasonable care and...

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