Claim No: CL-2024-000563 - [2025] EWHC 1586 (Comm)

The Supply Contract between Energyen and the Original HHI Signatory was for the supply of Feed Water Heaters (“FWHs”) for a thermal power plant in Saudi Arabia to be operated by the Saudi Electricity Company (“SEC”). According to the Award, the last FWH which was the subject of the Supply Contract was delivered FOB Kunsan Port in November 2015.

The Supply Contract was subject to an agreement to arbitrate disputes by ICC arbitration in London. Both the Supply Contract and the ancillary arbitration agreement are governed by English law.

The Supply Contract involved the shipment of a number of FWHs and associated services. It provided for the delivery of FWHs in various sets between 28 February 2015 and 30 October 2015. There was a warranty period of the shorter of 48 months from final delivery and 12 months from Preliminary Acceptance Date (which occurred in March 2018). However, clause 9.2.3 provided:

“VENDOR shall continue to be responsible for the remedy of any latent defects found after expiry of the Warranty Period as if such defects were found during the Warranty Period. Latent defect shall mean existing defects not found at the time of delivery or within the Warranty Period because neither BUYER nor COMPANY could reasonably perform Inspections during such periods, because such defects were hidden and not readily discernible by routine inspection, or any other reason whatsoever”.

By clause 9.3.1, Energyen promised to cure any defects and make good any damage caused by the defects within the timeframe specified by the Original HHI Signatory. If Energyen failed to “timely fulfil” its obligations, the Original HHI Signatory was entitled to get a third party to carry out the repair, and to a full indemnity for all costs.

In early 2015, there was an internal re-organisation within the Original HHI Signatory. A memorandum sent in January 2015 to all executive officers and departments described the effect of the organisational and personnel restructuring. Whereas before there had been an “Offshore Division” and a separate “Plant Division”, there was now to be a single “Offshore Plant Division”. Contemporary press reports referred to the Original HHI Signatory integrating its plant division into the offshore division, with the “integrated offshore plant division” to be operated by joint CEOs. The tone of the coverage suggests that the offshore division was very much the larger partner, and the contract with the SEC was one of the “Plant Division” contracts.

Another internal memorandum, taking effect from January 2019, discussed the “enactment of an official English name according to the organisational integration of the Offshore Plant business department”, which I find to be a reference to the integrated department created in January 2015. While the document is not entirely easy to understand, it is consistent with the single merged “Offshore Plant” business unit created in January 2015 continuing in existence. It offered a variety of potential English names for the integrated unit.

On 21 February 2019, the HHI Original Signatory placed a further purchase order connected with the subject-matter of the Supply Contract with Energyen, but involving additional services at an additional price. The purchase order provided that “the other terms and conditions other than above shall be as per” the Supply Contract.