HT-2023-000321 - [2025] EWHC 1764 (TCC)

KML claim liquidated damages between the date upon which KML contends (at least in its pleading) that Pharos ought contractually to have concluded the Embedment Works and the date it in fact did so.

It does so on the basis of Clauses 8.2 and 8.3. Clause 8.2 provides that ‘The Seller shall deliver the Goods or Services by the date specified in the Purchase Order’. Clause 8.3 provides that, ‘Should the Seller fail to deliver the goods or Services by the specified date for any reason other than Force Majeure, the Buyer (without prejudice to any other right or remedy which it may have) shall be entitled to…10% of the total Contract Price…for each week (or part thereof) in which the Seller fails to deliver them.’

No date was specified in the Revised Purchase Order, or its predecessor. Moreover, as I have found, the obligation as to time was one to complete in a reasonable time in accordance with the indicative programme, rather than a fixed and firm duration of 10 days. Mr Macey-Dare KC correctly accepted that there would be no general right to liquidated damages if the obligation was to complete within a reasonable time.

Whilst it was canvassed during exploration of the issue in Closing Submissions that, providing there was a fixed mobilisation date, liquidated damages would run until delivery of the UTV-670 ready for mobilisation, this cannot be right. The liquidated damages provisions affix to delivery of the services later than the date specified in the contract. KML’s case takes this to be the date upon which the Services were to be completed. KML’s pleading does not allege that the mobilisation date it says was agreed as 9 June 2022 was ‘the date specified’ for the purposes of Clauses 8.2 and Clauses 8.3. Even if it had been, such a claim would fail. The date for delivering the equipment to port – in effect at the very start of the services to be delivered under the Contract - could not sensibly be considered to be ‘the specified date’, as though it were some sort of milestone within a sophisticated machinery attaching liquidated damages to such milestones. That is simply not the way Clause 8.3 worked.

In the circumstances, KML had no right to liquidated damages for Pharos’s delays, whether in the context of the arrival of equipment at Esbjerg at the start of the Embedment Works or their completion.