HT-2020-000448 - [2024] EWHC 1185 (TCC)

Clause 8 provides a specific mechanism for the apportionment of responsibility where a Delay is attributable in part to the CONTRACTOR Default and in part to an ‘AUTHORITY Cause’.

DBS’s Written Opening submissions included Clause 8 in its extract of the relevant clauses of the Agreement, but did not otherwise refer to it. TCS’s Written Opening Submissions did not refer to Clause 8 at all, and no reference is made to Clause 8 in the pleadings. The Court queried the relevance of the Clause to either side’s case. This prompted a supplemental note from TCS in which it indicated that the clause applied to parallel delays, not merely to strictly concurrent delays, and that a delay can be ‘attributable in part’ to each party, without there being strictly concurrent causes. TCS submits that ‘first in time’ concurrency is not intended (i.e. the consequences of the events must exist simultaneously but they can start and end at different times and may have different potencies (period and potency being factors in the apportionment exercise)). It is argued that the apportionment exercise envisaged by Clause 8 is broadly similar to the apportionment of liability on account of contributory negligence or contribution among joint wrongdoers, where the focus is upon the degree of culpability involved in each of the causes of the Delay and the significance of each of the factors in causing the Delay albeit in practice culpability is likely to be the less important of these two factors. In essence, as clarified by Mr Lavy in oral Closing Submissions, TCS submits that Clause 8 is a contractual vehicle which gives a Court subject to English law the power to apportion delay, which exists under Scottish law (see City Inn Ltd v Shepherd Construction Ltd [2007] CSOH 190), but which does not otherwise exist under the English law (see Hamblen J, as he then was, in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm)). Clause 8, therefore, is said to be there to recognise that, in a multi-faceted, multi-path project with things going on all the time, it may be necessary to have a way of being able to work out in a relatively broad brush way who is responsible for delays without having to do an impossibly fine grained analysis.

DBS argues that it is not open to TCS to raise a case based upon Clause 8. Mr Croall relies upon the fact that it has not been pleaded, no factual or expert witness has considered the question of apportionment, or advances a case based upon apportionment. Even putting this aside, Mr Croall argues that the parties have not fulfilled the pre-requisite to the clause, namely the obligation ‘to negotiate in good faith with a view to agreeing a fair and reasonable apportionment of responsibility for the Delay.’ It is said that the obligation to negotiate the issue of fair and reasonable apportionment was necessary to give rise to the entitlement to escalate the issue in accordance with Dispute Resolution which would, in turn, have given rise to an entitlement to refer the matter of apportionment to Expert Determination. None of this happened. Moreover, it is pointed out that the clause only operates to reduce sums which are otherwise recoverable by way of ‘Delay Payments’ and ‘compensation payable pursuant to clause 7.4’, and that therefore the clause would not in any event assist TCS by requiring some form of apportionment in circumstances where no sums are due to TCS because (for example) it has not established that it would have been able to Achieve the Milestone by its Milestone Date.

Finally, it is said that Clause 8 is a ‘true concurrency’ clause, which permits apportionment only where true concurrency exists. There is no claim by either party in this case that the correct delay analysis gives rise to true concurrency.

In my judgment: