Vinci Construction UK Ltd v Beumer Group UK Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell |
| Judgment Date | 30 August 2017 |
| Neutral Citation | [2017] EWHC 2196 (TCC) |
| Docket Number | Case No: HT-2016-000280 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 30 August 2017 |
[2017] EWHC 2196 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice O'Farrell DBE
Case No: HT-2016-000280
Christopher Lewis QC (instructed by Fenwick Elliott LLP) for the Claimant
David Sears QC (instructed by Silver Shemmings LLP) for the Defendant
Hearing dates: 22 nd May 2017, 23 rd May 2017
In about 2011/2012 the claimant ("Vinci") entered into a contract with Gatwick Airport Ltd ("GAL") pursuant to which it undertook to carry out development works at the South Terminal, Gatwick Airport, comprising demolition of the existing pier connecting the terminal to the gates, including existing aircraft stands, design and construction of a new Pier 1, and a new baggage handling system, together with associated airside infrastructure ("the Project").
By a subcontract dated 8 November 2012 ("the Subcontract") made between Vinci and the defendant ("Beumer"), Vinci engaged Beumer to carry out the detailed design, manufacture, fabrication, supply, delivery, offloading, installation, testing, commissioning and user training in respect of the baggage handling system works forming part of the Project ("the Subcontract Works").
The Subcontract is based on the NEC Engineering and Construction Subcontract, Third Edition, subject to bespoke amendments made by the parties.
The Subcontract provides for sectional access to, and completion of, the Subcontract Works, including:
i) Section 5 – Baggage – Subcontract completion date: 12 May 2015;
ii) Section 6 – Remaining Works – Subcontract completion date: 27 May 2015.
The Subcontract provides for liquidated delay damages to be payable in the event that the sectional completion dates are not achieved.
Delays occurred to the works, giving rise to compensation events under the terms of the Subcontract. By a settlement agreement dated 30 October 2014 ("the Settlement Agreement"), the parties agreed to extend the access dates, sectional completion dates and other key dates, including:
i) Section 5 – Baggage – revised Subcontract completion date: 17 November 2015;
ii) Section 6 – Remaining Works – revised Subcontract completion date: 14 December 2015.
A dispute arose between the parties as to the operation of the sectional completion dates and delay damages provisions in the light of the Settlement Agreement. The dispute was referred to adjudication and on 9 May 2016 the adjudicator, Dr Cyril Chern, produced his decision in which he found that the provisions for delay damages were uncertain, inoperable and unenforceable.
On 21 October 2016 Vinci commenced these proceedings, seeking declaratory relief as to the proper construction of the Subcontract. The issue for determination by this court is whether, on a proper construction of the Subcontract, as amended by the Settlement Agreement, the provisions for sectional completion and delay damages are valid, as submitted by Vinci, or unenforceable by reason of uncertainty, as submitted by Beumer.
The Subcontract
The terms of the Subcontract are set out in the following documents:
i) the Agreement dated 8 November 2012;
ii) the NEC 3 Engineering and Construction Subcontract, Option A, priced subcontract with activity schedule, with Option W2 (Dispute Resolution procedure) and Options X2, X5, X7, X13, X16, X17, Y(UK)3 and Z, all as amended by Schedule 3 to the Agreement;
iii) Schedules 1 – 12 of the Agreement.
Clause 4 of the Agreement is an entire agreement provision.
Clause 5 of the Agreement provides as follows:
"5.1 The Subcontractor shall be deemed to have full knowledge of the provisions of the Main Contract (other than the details of the Contractor's prices referred to therein), and the Contractor shall, if so requested by the Sub-Contractor, provide the Sub-Contractor with a true copy of the Main Contract less such details.
5.2 Save where the provisions of the Subcontract otherwise require, the Subcontractor shall so design, execute, complete and maintain the Subcontract Works so that no act or omission of his in relation thereto shall constitute, cause or contribute to any breach by the Contractor of any of his obligations under the Main contract and the Subcontractor shall, save as aforesaid, assume and perform hereunder all the obligations and liabilities of the Contractor under the Main Contract in relation to the subcontract works…"
Clause 20.1 of the Conditions (as amended by clause Z10) provides:
"The Subcontractor Provides the Subcontract Works in accordance with the Subcontract Works Information and any accepted Subcontractor's proposals…"
The Subcontractor's proposals are defined in clause Z9 as:
"the Subcontractor's proposed design (which differs from the Employer's design as contained in the Works Information) for the following elements of the works:
• Baggage
As more particularly described in paragraphs D.1.12.1.5.3 of the Works Information and upon which the Prices and Completion Date are based."
Option X5 provided for sectional completion of the works:
"In these conditions of subcontract, unless stated as the whole of the subcontract works, each reference and clause relevant to
• The subcontract works,
• Completion and
• Subcontract Completion Date
applies, as the case may be, to either the whole of the subcontract works or any section of the subcontract works."
Clause 30.1 provides:
"The Subcontractor does not start work on the Site until the first subcontract access date and does the work so that Completion is on or before the Subcontract Completion Date."
Clause 30.2 provides:
"The Contractor decides the date of Completion. The Contractor certifies Completion within one week of Completion."
Clause 30.3 (as amended by Schedule 3) provides:
"The Subcontractor shall execute the subcontract works regularly and diligently so that the condition stated for each Key Date is met the by Key Date and the subcontract works are completed by the Subcontract Completion Date."
Clause 31.1 provides:
"If a programme is not identified in the Subcontract Data, the Subcontractor submits a first programme to the Contractor for acceptance within the period stated in the Subcontract Data."
Clause 31.2 provides:
"The Subcontractor shows on each programme which he submits for acceptance
• the subcontract starting date, subcontract access dates, Key Dates and Subcontract Completion Date …"
The subcontract access dates are set out in Schedule 4 (the Subcontract Data):
| " Part of the Site | Date |
| Virgin Buildings – Removal of redundant High Risk Carousel, feed conveyor and plough | 28 January 2013 |
| Main Works – new Baggage Hall – Grid Lines 10–15 | 04 April 2014 |
| Main Works – new Baggage hall – Grid Lines 03–10 | 27 May 2014 |
| Access Stand 11 (This related to disconnection of equipment only) | 13 May 2015" |
A Key Date is defined in clause 11.2 as:
"the date by which work is to meet the Condition stated. The Key Date is the key date stated in the Subcontract Data and the Condition is the condition stated in the Subcontract Data unless later changed in accordance with this subcontract."
The key dates and conditions to be met are set out in Schedule 4 and include:
"2.0 ELEVEN WEEKS prior to the Baggage sectional completion date the works forming part of this section shall achieve Completion excepting Airport Operational Readiness trials and attendance on same. Completion will not be achieved until the completion of Airport Operational Readiness trials."
The subcontract completion date for each section of the subcontract works is set out in Schedule 4:
| "Section | " description | subcontract completion date |
| 1 | Design submission A | 14 December 2012 |
| 2 | Design submission B | 16 September 2013 |
| 3 | Temporary Stand Provision | N/A |
| 4 | Pier & Airfield | N/A |
| 5 | Baggage | 12 May 2015 |
| 6 | Remaining Works | 27 May 2015" |
Schedule 4 states:
"The subcontract completion date for the whole of the subcontract works is 27 May 2015."
Option X7 sets out the provisions for delay damages:
"X7.1 The Subcontractor pays delay damages at the rate stated in the Subcontract Data from the Subcontract Completion Date for each day until the earlier of
• Completion and
• the date on which the Contractor takes over the subcontract works."
The Delay damages for each section of the subcontract works is set out in Schedule 4:
| "Section | Description | Amount per day |
| 1 | Design submission A | £19,000 / calendar day |
| 2 | Design submission B | £25,000 / calendar day |
| 3 | Temporary Stand Provision | N/A |
| 4 | Pier & Airfield | N/A |
| 5 | Baggage | £22,500 / calendar day |
| 6 | Remaining Works | £17,000 / calendar day" |
Clause 35.1 provides:
"The Contractor need not take over the subcontract works before the Subcontract Completion Date if it is stated in the Subcontract Data that he is not willing to do so. Otherwise the Contractor takes over the subcontract works not later than two weeks after Completion."
Schedule 4 provides that the Subcontract Works are described in Schedule 12 and all documents referred to therein.
The Works Package Content Sheet, which is listed in Schedule 12 as one of the documents comprising the Sub-Contract Works Information, states:
"The Subcontract Works Information is contained within schedule 12 to the Subcontract Agreement in two parts as follows:
Part a – Package specific Subcontract Works Information detailing the package scope of works and
Part b – Project specific Subcontract Works Information detailing the remaining Contractors Works Information (where relevant). Part b includes documents...
To continue reading
Request your trial
-
Soteria Insurance Ltd (formerly CIS General Insurance Ltd) v IBM United Kingdom Ltd
...also sought at [687] to distinguish her own decision in The Royal Devon & Exeter NHS Foundation Trust v ATOS IT Services UK Limited [2017] EWHC 2196 (TCC). 29 The judge's discussion and conclusions on the construction of clause 23.3 were typically crisp: “680. Applying the above principles......
-
Vinci Construction UK Ltd v Beumer Group UK Ltd
...Court and were resolved in Vinci's favour by the Judgment of O'Farrell J in Vinci Construction UK Limited v. Beumer Group UK Limited [2017] EWHC 2196 (TCC) which was handed down on 30th August 2017. 7 Following the Judgment of O'Farrell J, Vinci issued a Payment Certificate on 25th October ......
-
Buckingham Group Contracting Ltd v Peel L&P Investments and Property Ltd
...a useful (and uncontroversial) summary of the position as expressed by O'Farrell J in Vinci Construction UK Ltd v Beumer Group UK Ltd [2017] EWHC 2196, TCC at [47] to [49] as follows: “[47] The courts are reluctant to hold a provision in a contract void for uncertainty, particularly where ......
-
Liquidated damages for sectional completion
...related sections; and clearly defined liquidated damages figures for each section. Vinci Construction UK Ltd v. Beumer Group UK Ltd [2017] EWHC 2196 (TCC) highlights the kinds of issues that can arise where there is a lack of clarity in the drafting of a contract providing for sectional Vin......
-
It's All In The Drafting: Clearly Worded Contracts Make A Difference
...Example 1: unclear work scope and delay provisions for sectional completion In Vinci Construction UK Ltd v. Beumer Group UK Ltd [2017] EWHC 2196 (TCC), the claimant (Vinci) was contracted to develop part of the South Terminal at Gatwick Airport for Gatwick Airport Vinci subcontracted variou......
-
Projects & Construction Law Update 11 October 2017
...CASE UPDATE But what does it mean? The court's approach to competing interpretations Vinci Construction UK Ltd v Beumer Group UK Ltd [2017] EWHC 2196 (TCC) The courts have once again shown their reluctance to hold a contract void for uncertainty, finding that the sectional completion and de......
-
Sectional Completion ' Pitfalls & Risks
...illogical, the intention of the Parties was clear and unambiguous. In Vinci Construction UK Limited v Beumer Group UK Limited [2017] EWHC 2196 (TCC) O'Farrell J held that whilst the contract provided for liquidated damages for Completion by Section, it did not define the works encompassed i......
-
Damages
...Construction Ltd [2008] EWhC 2617 (TCC) (considering a JCT 1998 standard form); Vinci Construction UK Ltd v Beumer Group UK Ltd [2017] EWhC 2196 (TCC). alternatively, if liquidated damages are only payable for failure to meet the ultimate completion date, general damages may nevertheless be......
-
Table of cases
...III.26.56 Vincent v premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609 I.2.90 Vinci Construction UK Ltd v Beumer Group UK Ltd [2017] EWhC 2196 (TCC) II.13.136 Vinci Construction UK Ltd v Beumer Group UK Ltd [2018] EWhC 1874 (TCC) III.24.116 Vinden partnership Ltd v OrCa Solutions Ltd [20......