Van Oord UK Ltd (First Claimant) Sicim Roadbridge Ltd (Second Claimant) v Allseas Uk Ltd
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Coulson |
| Judgment Date | 12 November 2015 |
| Neutral Citation | [2015] EWHC 3074 (TCC) |
| Docket Number | Case No: HT-2014-000032 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 12 November 2015 |
[2015] EWHC 3074 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Coulson
Case No: HT-2014-000032
Ms Finola O'Farrell QC, Mr Michael Stimpson and Ms Jennie Wild (instructed by K&L Gates) for the Claimants
Mr Simon Lofthouse QC and Mr Robert Clay (instructed by Curtis Davis Garrard LLP) for the Defendant
Hearing dates: 13, 14, 15, 16, 20, 21, 22, 23, 28, 29, 30 July & 28, 29 September 2015
INTRODUCTION
In this case, the Claimants ("OSR") make three disruption and prolongation claims against the Defendant ("AUK") arising out of the onshore laying of a thirty inch gas export pipeline ("the gas export pipeline") in the Shetland Islands in Scotland. At the start of the trial, the claims were said to be for some £10 million (itself a reduction from the original sums sought), together with interest. By the time of OSR's closing submissions, that total had been reduced by about £2 million, a reflection of some of the problems for OSR highlighted in the evidence. OSR's claims are denied, and AUK counterclaim the monies which they paid to OSR on an interim basis in respect of these claims.
AUK was the Principal Contractor engaged by Total E&P UK Limited ("TEP") to carry out both the offshore and onshore works involved in the laying of gas pipelines, which formed part of the Total Laggan-Tormore gas field development at Sullom Voe, on Shetland. By a Contract dated 18 November 2010, AUK engaged OSR to carry out the procurement, supply, construction, installation, flooding, cleaning, gauging and testing of pipelines, and certain on-shore works. This dispute between OSR and AUK concerns only the onshore work element in respect of the gas export pipeline. This was the work covered by Works Package 10 ("WP10").
The proposed route of the gas export pipeline onshore was from the Shetland Gas Plant ("SGP"), on the north western coast, to Firths Voe, on the eastern coast. The gas export pipeline was to run in a dogleg: the first half, called the Northern section, ran almost due south of SGP until it reached the public road B9076; the second half, called the Southern section, ran almost due east from the road crossing (RDX 2) to Firths Voe. Just north of the road crossing the gas export pipeline crossed two existing pipelines, the Brent and the Ninian, owned by TAQA and BP respectively. The total length of the gas export pipeline onshore was about 5.7 kilometres.
OSR were made up of two separate companies, Van Oord UK Limited and Sicim Roadbridge Limited. This latter company was itself formed for the purposes of this project, and was made up of Roadbridge, experienced Irish civil engineering contractors, and Sicim, an Italian company specialising in the carrying out of mechanical works. It is a notable feature of this case that:
(a) The evidence about Roadbridge's performance was generally positive, even from AUK's witnesses;
(b) The evidence about Sicim's performance was generally negative, even from Roadbridge's witnesses;
(c) There was some evidence to support some elements of the Roadbridge claims, although the fundamental problems with that evidence are addressed in Section 4 below. By contrast there was very little (and sometimes no) evidence to support the Sicim claims at all;
(d) The value of the Roadbridge claims was relatively modest;
(e) The value of the Sicim claims was almost always exaggerated, and the subject of numerous conceded reductions before, during and even after the trial. The Sicim claims amounted to about 80% of the value of the OSR claims in these proceedings.
The works began in September 2011. The mainline works were completed in September 2012. A separate and discreet area of work, referred to as the beach valve, was significantly delayed and not completed until July 2014.
The three claims made by OSR against AUK in these proceedings are:
(a) A claim for disruption and prolongation arising out of what is alleged to have been unforeseen ground conditions. This claim, which has been through a number of iterations, involves a consideration of the way in which the works were planned and then carried out on the Southern section, between the road crossing at RDX 2 and Firths Voe. OSR say that they originally intended to carry out this work by constructing a stone road 8 metres wide, with the pipe being laid in a trench excavated into the untreated ground to the side. They say that, because peat was encountered at greater depths than they could reasonably have foreseen in the Southern section of the works, they were obliged to build a 13.5 metre wide stone embankment, and lay the pipe within that embankment. This is referred to in the documents as Claim 3. It should be noted at the outset that this claim does not affect the Northern section, where OSR accept that they always intended to build a stone embankment.
(b) A claim for disruption and prolongation arising out of what is said to have been the failure on the part of AUK to obtain permission for temporary crossings from the owners of the Brent and Ninian pipelines, over the route of which this gas export pipeline passed. The claim is based on what OSR say were the deleterious consequences of AUK's failure to obtain permission for OSR to construct and use temporary crossings above these pipelines, in order to facilitate their construction traffic. TAQA and BP (the respective owners of the Brent and Ninian pipelines) never gave permission for these temporary crossings; instead agreement (in the form of formal proximity of agreements) was reached much later, and was related only to the permanent works, that is to say the permanent crossings which had to be constructed to carry the gas export pipeline beneath the existing Brent and Ninian pipelines. There is a related (but logically distinct) claim as a result of AUK's delay in obtaining these proximity agreements. These two claims are referred to in the documents as Claim 2.
(c) A claim for additional supervision costs arising out of the delay in the supply by AUK of the 55 tonne beach valve and cabin. The delivery of the valve was delayed until 2013 and the cabin was delayed until 2014. This claim is not disputed in principle: indeed the work has been paid for. This is a dispute about quantification only, and is referred to in the documents as Claim 4.
I set out the relevant terms of the Contract in Section 2. I summarise briefly some of the significant events in Section 3. I outline my views as to the evidence of the factual and expert witnesses in Section 4. Then, in Section 5, before going on to deal with the claim for unforeseen ground conditions, I address what was referred to in the documents as Claim 1 which, although now abandoned by OSR, provides an important backdrop against which to consider Claim 3, the unforeseen ground conditions claim. I then deal with Claim 3 itself in Section 6. I deal with the temporary crossings/proximity agreement claim, Claim 2, in Section 7. I address Claim 4, in respect of the beach valve, in Section 8. There is a short summary of my conclusions in Section 9.
Before embarking on any of these tasks, I should convey my thanks to all counsel for the manner in which the hearing was conducted. The bundle ran to over 70 lever-arch files and, as I explain in greater detail in Section 4 below, the oral evidence of some of the witnesses was less than helpful. Despite this, the hearing throughout was conducted with analytical skill, good humour and considerable patience. The written openings and closings were clear and full, and therefore of great assistance to the court.
THE CONTRACT
The Contract of 18 November 2010 contained 61 Articles, 10 Annexes and 12 Exhibits. Happily, it is unnecessary to set out anything other than a small part of those provisions. In all the quotations below, "the Contractor" is OSR and "the Company" is AUK.
Article 12 was entitled 'Awareness of Work Conditions'. It was in the following terms:
"12.1 ACQUAINTANCE WITH WORK CONDITIONS
12.1.1 CONTRACTOR hereby declares and warrants that by entering into THE CONTRACT it has fully acquainted itself as to all local, regional, national and SITE conditions which could affect the performance of THE WORK and/or its obligations under THE CONTRACT, including:
(a) the nature and location of THE SITE including means of access thereto,
(b) as applicable, the atmospheric, meteorological, bathymetric, topographic, marine, oceanographic, hydrological, geological, ocean floor, sub-surface, geotechnical, geophysical, lighting conditions and the like,
(c) the equipment, facilities and resources needed for the performance of THE WORK and the remedying of any defect therein, including accommodation, transportation, handling and storage conditions and the like,
(d) the availability of labour, equipment, parts, consumables, procurement items, fuel, water, electric power and other utilities and the like,
(e) the APPLICABLE LAWS, local customs and fiscal and social legislation and practises, import/export regulations and the like,
(f) generally, all and any other local conditions and/or other conditions of THE SITE that affect or may affect CONTRACTOR'S performance of the WORK and CONTRACT obligations.
12.1.2 CONTRACTOR acquaintance with respect to the conditions related to SITE bathymetry, sea-bed status, geology, sub-surface and to the existing facilities is based on the relevant data and information included in the CONTRACT...
To continue reading
Request your trial
-
Van Oord Uk Ltd (First Claimant) v Sicim Roadbridge Ltd (Second Claimant) Allseas Uk Ltd
...2015 The Honourable Mr Justice Coulson 1 1 At a hearing on 12 November 2015, I handed down the substantive Judgment in this case ( [2015] EWHC 3074 (TCC)). The net effect of that Judgment was that the claimant (OSR) was liable to repay to the defendant (AUK) the sum of £2,768,405.17. The ou......
-
Cpb Contractors Pty Ltd v Wsp Nz Ltd
...Ltd v Blackhall & Struthers (No 2) [1978] 2 NZLR 97 (CA) at 129, per Casey J [Bevan Investments]. Van Oord UK Ltd v Allseas UK Ltd [2015] EWHC 3074 (TCC); and H Infrastructure Ltd (in rec and in liq) v Worley New Zealand Ltd [2022] NZHC Sew Hoy & Sons Ltd (in rec & in liq) v Coopers & Lybra......
-
ASTON STAR SDN BHD vs ZUMO ENGINEERING (M) SDN BHD
...in paragraphs [58] to [65] above. Consequently, DW3”s computation is also unsatisfactory; see Van Oord UK Ltd & Anr v Allseas UK Ltd [2015] EWHC 3074 TCC. [74] I reiterate that the burden of proof to prove its claim satisfactorily lies upon the Defendant. In Spind Malaysia Sdn Bhd v Justrad......
-
Independent Experts: Lessons From The Courts
...Civ 63. 14. [2017] EWCA Civ 63. 15. See paragraph 13.3.1 of the TCC Guide. 16. [2016] EWHC 2856 (TCC). 17. [2017] EWHC 29 (TCC). 18. [2015] EWHC 3074 (TCC). Please click here to view previous issues of The content of this article is intended to provide a general guide to the subject matter.......
-
The 'Price' Of Expert Shopping
...Ltd [2016] EWHC 2171 (TCC) 10. Coyne v Morgan [2016] BLR 491 11. [2017] EWCA Civ 1016, at paragraph 15 12. At paragraph 47 13. [2015] EWHC 3074 (TCC) 14. [2015] EWHC 3455 (TCC) 15. [2021] EWHC 1413 (TCC) This article is taken from Fenwick Elliott's 2021/2022 Annual Review. To read further a......
-
The 'Price' Of Expert Shopping
...Ltd [2016] EWHC 2171 (TCC) 10. Coyne v Morgan [2016] BLR 491 11. [2017] EWCA Civ 1016, at paragraph 15 12. At paragraph 47 13. [2015] EWHC 3074 (TCC) 14. [2015] EWHC 3455 (TCC) 15. [2021] EWHC 1413 (TCC) This article is taken from Fenwick Elliott's 2021/2022 Annual Review. To read further a......
-
Price and payment
...Pty Ltd [2015] nSWSc 616 at [170]–[172], per Ball J (airmed in this respect: [2016] nSWca 117); Van Oord UK Ltd v Allseas UK Ltd [2015] eWHc 3074 (tcc) at [174]–[182], per coulson J; Chun Wo Building Construction Ltd v Metta Resources Ltd [2016] HKcFi 1357 at [160]–[162], per anthony chan J......
-
Variations
...Diplock J. 29 Clayton v Woodman & Son (Builders) Ltd [1962] 1 WLr 585 at 592, per Donovan LJ. 30 See Van Oord UK Ltd v Allseas UK Ltd [2015] EWhC 3074 (TCC) at [110]–[112], per Coulson J. 31 See, eg, the FIDIC red Book (2nd edition, 2017) clause 13.6. See also Energy Australia v Active Tree......
-
The site
...necessary for such information either to be incorporated or referred to in the relevant contract: cf Van Oord UK Ltd v Allseas UK Ltd [2015] EWhC 3074 (TCC) at [185], per Coulson J. 120 It is not uncommon for contracts to express the threshold in terms of whether an experienced contractor i......
-
Litigation
...a witness gives evidence for part of the hearing, and then lees from the court, never to return: see Van Oord UK Ltd v Allseas UK Ltd [2015] EWHC 3074 (TCC) at [80], per Coulson J. 935 Bridge UK.Com Ltd v Abbey Pynford plc [2007] EWHC 728 (TCC) at [47], per Ramsey J. See also McGlinn v Walt......