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

Pharos’ claim for payment under the Contract and KML’s claim for damages both have as their foundation an analysis of what a reasonable time for carrying out the Embedment Works would be, taking account of the relevant contractual allocation of risk.

Neither side has presented any sort of critical path analysis. Prior to closings, I asked both sides to consider specifically what the Court’s approach should be to the determination of the correct counterfactual for the purposes of determining how long the works reasonably would have taken if neither of their primary cases were correct (e.g. 10 days fixed, with no waiting on weather, on KML’s case, or, as long as it in fact took, on Pharos’s case).

In Closing, Mr Macey-Dare KC presented four counterfactual analyses by way of a spreadsheet, each of which took different conclusions on key issues as their basis. Two counterfactuals were based upon the UTV-670 arriving, as KML’s case had been, on 9 June 2022, one with trenching commencing offshore and the other with trenching commencing nearshore; and the other two counterfactuals were based upon the UTV-670 arriving on 20 June 2022, again with the two variables being nearshore commencement and offshore commencement.

Mr Woolgar objected to these counterfactuals, on the basis that they should have been presented sooner and available for interrogation by the experts. However, I do not accept that the submission as to what counterfactual might be adopted given particular findings was a matter for either side’s expert opinion. The spreadsheet was a helpful submission on the basis of the factual evidence, at least as contended by KML, as to what the Court can or should conclude would have happened in certain scenarios. It was provided in advance of oral closing submissions and could have been the subject of criticism or observations by Mr Woolgar had he wished. Mr Macey-Dare KC sensibly chose two key variables (the arrival date of the UTV-670 and whether works should have commenced nearshore or offshore) which were the subject of exploration in the evidence and which are matters upon which the Court has reached conclusions.

I have therefore adopted Mr Macey-Dare KC’s counterfactual spreadsheet approach as a sensible starting point for analysing what a reasonable time was for completing the works and/or causation. Of the four counterfactuals, the last (arriving 20^th June 2022 and commencing nearshore) accords with my conclusions as to the appropriate assumptions to include within an assessment of a reasonable time. I shall refer to this as ‘the KML Counterfactual’, which is set out together with an adjusted version (‘the Adjusted Counterfactual’) at Appendix A to this judgment. The KML Counterfactual concludes that the works ought to have demobilised on 5 August 2022 rather than 17 August 2022, the actual date of demobilisation, and, as such, that there were 12 days of culpable delay caused by Pharos’s downtime and/or slower than reasonable progress as a result of the breaches it alleges.

The KML Counterfactual allows, around the periods of bad weather, for 12 days’ trenching. It also includes, in addition to the trenching period, two days for dredging of the nearshore sandwave during nearshore operations. Given actual trenching time (in the actual seabed conditions) was 166 hours (6.9 days), I consider this, together with the 2 days for dredging the nearshore sandwaves, a reasonable time, taking account of the original indicative programme, the contractual risk allocation and including a 24 day aggregate period for normal downtime.

The Adjusted Counterfactual amends the KML Counterfactual to account for periods of waiting on weather which, for the reasons I have set out below, it underestimates. In making the adjustments I have relied upon the spreadsheet produced by Mr Woolgar in closing (‘the DPR Spreadsheet’), which sought to produce a detailed day-by-day analysis of downtime split into the categories as identified by Mr Moore, and which I have broadly accepted for the reasons set out above. The adjustments I have made are as follows:

The Adjusted Counterfactual shows that the works, undertaken reasonably and accounting for weather, would have concluded on 9 August, instead of 17August.

I note that no specific allowance has been made in the KML Counterfactual for waiting on tides. However, it is clear from the DPR Spreadsheet that the vast majority of time for waiting on tides took place on 9 August 2022. The waiting was required in order to cross the sandbar. Pursuant to the Adjusted Counterfactual, the Embedment Works would have been completed sooner and 9 August would have been the day for demobilisation. It is not necessary to factor this time, therefore, into the Adjusted Counterfactual. Whilst there were, in addition, about 5 hours waiting on tides in the preceding period (mostly on 26 June 2022), and I consider this adequately accounted for in the 12 x 24 hour periods allowed for trenching nearshore and offshore. In these circumstances, no further account needs to be taken of tides in the Adjusted Counterfactual.

On the basis of the delta between actual completion on 17 August 2022 and that assessed within the Adjusted Counterfactual, there are therefore 8 days of ‘culpable delay’. The 113 hours specifically identified downtime from Mr Moore’s analysis accounts for about 4.7 days. 3.3 days therefore represents general ‘degradation’ of the operation caused by the real, but not specifically quantifiable, impact of the breaches which I have found. This, on the basis of all the evidence I have heard, appears reasonable. Moreover, and irrespective of the allocation to particular identifiable issues, the 8 days’ delay is also the result of Pharos’s failure, in breach of the implied term, to carry out the works in a reasonable time.

One benefit of the Adjusted Counterfactual analysis in the context of claim and counterclaim is that it attributes each period of time either to productive working (or permissible maintenance) or waiting on weather: there is no period of concurrency within the Adjusted Counterfactual whilst operational downtime occurs at the same time as waiting on weather.

It follows from the Adjusted Counterfactual that Pharos is entitled to payment pursuant to the Contract, including waiting on weather, assuming arrival of UTV-670 on 20 June, and demobilisation on 9 August 2022.

There are 8 days of culpable delay which, subject to questions of loss, are culpable delays for which Pharos is liable to KML for breach of contract.