Mathias Cheung (instructed as junior counsel) acted successfully on behalf of the Claimant, Energy Works (Hull) Ltd (EWHL), in a preliminary issues hearing in the matter of Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd & Others [2020] EWHC 2537 (TCC).
These ongoing TCC proceedings arise from the design and construction of a fluidised bed gasification power plant in Hull which processes refuse derived fuel to produce steam. There have been a series of legal proceedings relating to this same project, including the recent decision of Engie Fabricom (UK) Ltd v MW High Tech Projects UK Ltd [2020] EWHC 1626 (TCC) which confirmed that the primary activity at the plant is power generation for the purposes of section 105(2)(c) of the Housing Grants, Construction and Regeneration Act 1996 as amended.
The present multi-partite proceedings concern EWHL’s claim against its main contractor, MW, for damages in respect of delay, defect rectification, and the post-termination costs of completing the works. MW in turn seeks to pass on any liability it might have to its sub-contractor, Outotec, through a Part 20 additional claim.
The latest TCC judgment is the culmination of a two-day remote hearing concerning the following two preliminary issues:
EWHL’s involvement in the preliminary issues hearing was confined to the first issue (i.e. the legal effect of the assignment of Outotec’s sub-contract), which has a direct impact on the legal effect of numerous other post-termination assignments of MW’s purchase orders and sub-contracts.
MW contended that the assignment only transferred the right to the future performance of Outotec’s sub-contract but not the accrued rights. Alternatively, MW sought to argue that the assignment transferred both the benefit and the burden of Outotec’s sub-contract and was effectively a novation.
In a detailed judgment, O’Farrell J rejected all of MW’s contentions on the issue of assignment and accepted EWHL and Outotec’s submissions: see paragraphs 56 to 108 of the judgment. In summary, the judge concluded as follows:
In relation to the second preliminary issue regarding MW’s contribution claims, O’Farrell J concluded that at least part of any MW liability to EWHL for delay and defects under the main contact is the same damage as any Outotec liability under the sub-contract / deed of warranty, but that MW’s liability to EWHL for losses flowing from termination of the main contract is not the same damage any Outotec liability under the sub-contract / deed of warranty.
The full trial of this matter on liability and quantum will take place in June/July 2021.
Mathias Cheung (instructed as junior counsel by Fenwick Elliott LLP) for the Claimant.
To read the full judgment please click here: Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd & Others [2020] EWHC 2537 (TCC)
This paper was written by James Howells QC for the Society of Construction Law (Singapore)…
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