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

Supply of the UTV-670 unable to cope with seabed gradients

At various times, the UTV-670 was unable to trench given the gradients that were in fact encountered in the very nearshore sandbank, and the soil conditions which it encountered in other locations including the offshore sandbank. It is noted that, without prejudice to its strict entitlement, KML’s pleaded position is to accept 14.72 hours for 29 June and 24 hours on 30 June (as part of 4 days) for weather and ‘slope inclination’.

There is no dispute that, as the parties were aware, the UTV-670 had a 15 degree working limit. KML relies, in addition, on Mr Scullion’s evidence, unchallenged, that Mr Taylor and Mr Shaw of Pharos confirmed to him orally that the UTV-670 could work with gradients up to 20 degrees, and upon Mr Gamble’s description of the UTV-670 as ‘exceptionally manoeuvrable’. KML contends that the delays caused by manoeuvrability issues caused by slopes in excess of 15 degrees, or otherwise in difficult soils, are culpable delays for which Pharos is liable.

Mr Moore’s analysis demonstrates that just over 194 hours were lost due to soil conditions which caused the UTV-670 to become stuck. He includes these hours within his assessment of a ‘reasonable time’ for completing the trenching works, and therefore does not consider that this was the result of an inherent unfitness for purpose of the equipment or that way in which the Pharos dealt with the seabed conditions was unreasonable.

In relation to KML’s principal argument, I do not consider that the fact that the UTV-670 was unable to deal with certain seabed conditions itself meant that the UTV-670 was unfit for purpose or the result of an assessment of suitability which was undertaken without reasonable skill and care. This is principally because such a case is not supported by Mr Scott, KML’s own expert, who expresses no such opinion about the UTV-670 (notwithstanding lots of other criticisms of the associated equipment). Similarly, the fact that mobilised sand waves might have made certain areas untrenchable without some localised dredging, as happened ultimately to enable trenching in the very nearshore area, does not mean its choice for this project was negligent (again, an allegation which Mr Scott does not advance). Neither KML nor its expert identify a different piece of machinery or methodology which ought to have been used instead. The UTV-670 demonstrated that it was capable of achieving trenching speeds in the region of those indicated by Pharos: Mr Moore calculates an average trenching speed of 4.98 m/min, or 298m/hour over a distance of 1824m in July 2022, and Pharos had made clear that the actual speed would be dependent upon the in situ conditions encountered.

In respect of the areas of gradient over 22 degrees, Mr Scott says, instead, that the UTV-670 getting stuck was entirely preventable, and that he would have expected Pharos to have reviewed the information provided in respect of what he calls ‘the gulley’, raised the issue with KML and stopped the tool from trenching in the area before it got stuck. In oral evidence, he repeated (a number of times) that once the troublesome area had been identified or encountered, Pharos should have swiftly moved from nearshore to offshore areas, progressing the work effectively, whilst mitigation was undertaken in the nearshore area before returning. In other words, Mr Scott’s focus in respect of seabed conditions downtime issue is not to blame the UTV-670 itself (although he is critical of a good deal of the ancillary kit, which I consider further below) or its selection, but to contend that the Pharos operatives failed in the way they dealt with the issues as they arose. I return to this issue, therefore, further below.

KML also relies upon Clause 18 of the Standard Terms and Conditions to dismiss Pharos’ reliance upon seabed conditions to justify the time taken to trench certain areas. Although not worded particularly elegantly, the clause stipulates that the Seller, Pharos, shall be deemed to have satisfied itself as to all matters which could affect the progress or performance of its obligations.

In the context of an obligation with a fixed time, Clause 18 may be effective to preclude a Seller from seeking a variation to extend time (or from claiming that the time obligation had become at large, given the absence of any effective extension of time machinery, save for limited Force Majeure) in circumstances where they come across a condition which they had not foreseen. However, Pharos’ obligation was to complete the works reasonably in accordance with the ‘indicative’ programme, and this deeming provision clause does not change or narrow this obligation. The speed of the UTV-670 necessarily depends upon the nature of the conditions as they are found to be, and this was at least one of the reasons that the programme was agreed to be ‘indicative’. Deeming a contractor knowledgeable of what the conditions were to be encountered does not mean that those conditions are irrelevant when determining whether the contractor has reasonably progressed the works in accordance with an ‘indicative’ programme. However, neither is deeming such knowledge to Pharos irrelevant. If, for example, delay is caused not by the conditions themselves but (as Mr Scott effectively says) an unpreparedness for those conditions, then such delay may not be reasonable, and therefore in breach of the obligation to carry out the works reasonably in accordance with the indicative programme.

Returning, therefore to Mr Scott’s central complaint relating to the way in which Pharos dealt with the nearshore seabed conditions, rather than the UTV-670 itself, this allegation was effectively encompassed in the argument that Pharos failed to advise KML on or around 23 June 2022 to reschedule the trenching works so as to commence work in the offshore section. This contention has a narrower focus than the pleaded case, which is set out at paragraph 37(5)(b) of the Amended Defence and Counterclaim. At (v) and (vi), KML plead that Pharos ought to have advised on or before 24 May 2022, and at all times thereafter, that the Tool should be deployed first to work in the offshore area, and that the MBES survey of the near and very near inshore areas should be conducted simultaneously with, or as soon as practicable after, the commencement of that work; and it ought to have advised KML to amend the Method Statement accordingly. It is said that this would have minimised the reasonably foreseeable risk, which was realised, of delays and difficulties in the event of seabed conditions which required dredging or other remedial works before the UTV-670 would be suitable to operate in those areas.

In light of the pleaded allegation, Mr Gamble’s written evidence dealt with the extent to which, if at all, Pharos had advised KML to change the order in which the works should be carried out at any time (although, given the pleading to which he was responding, he was, justifiably, not focussed specifically on 23 June 2022, the case as closed). Mr Gamble said:

“I recall discussing the idea of changing the sequence of the works with Jimmy Down (KML’s marine supervisor). We were told that this was not possible —- my understanding was that the Marine Warranty Surveyor required the MBES survey to be completed before it would issue a license for us to operate the Tool anywhere (even further offshore where the MBES survey had already been carried out) because that is what the method statement said. The Marine Warranty Surveyor was ABL, an independent third party who was responsible for assessing the risks associated with the project (e.g. risks of property damage, and health and safety risks) and certifying that these risks were at an acceptable level. Compliance with the instructions of the Marine Warranty Surveyor is usually a requirement of the insurers.

Because the method statement required the MBES survey to be completed in its entirety before works commenced (and because the Marine Warranty Surveyor would not issue a licence until this was done), KML did not permit Pharos to change the sequence of the works and start trenching from the offshore area, even though the MBES data for this area was already available and the Tool was on site and ready to go.”

No evidence was served from Mr Down. Mr Gamble was cross-examined about this evidence. It was put to him that the discussion with Mr Down did not happen. Mr Gamble was clear that it did, and that if Mr Down had wished to change the sequence following the suggestion, he could have done. I accept Mr Gamble’s recollection on this point. I regarded Mr Gamble as an honest witness. I note that, contrary to KML’s case, Mr Gamble was demonstrably correct in relation to the delays to the MBES survey being caused by weather rather than the absence of the UTV-670, and this gives me comfort that he is, likewise, correct in this section of his evidence notwithstanding the lack of any emails at the time. It is entirely credible that, as Mr Gamble explained, the discussion took place on deck, and that when Mr Down dismissed the idea, Mr Gamble did not consider it appropriate to take the point further.

Whilst there is no suggestion that Mr Gamble, or anyone else, raised the point about changing the method statement in respect of the sequence again specifically on 23 June 2022, I do not regard it as unreasonable for Pharos not to have done so, given that the issue had been raised once shortly before and not taken forward by Mr Down. The claim that Pharos failed to take reasonable skill and care in failing to advise a sequence change to mitigate the effect of the seabed condition difficulties therefore fails.

Nevertheless, as I have indicated above, a ‘reasonable time’ must take into account not just the actual circumstances as they were encountered, but (a) the ‘indicative’ programme of 10 days and (b) the required preparedness for coping with worse than anticipated seabed conditions pursuant to Clause 18. Pharos did not have a ‘blank cheque’ in respect of its time obligation in the context of dealing with seabed conditions. These factors are taken account of when I consider what a reasonable time for completing the works was further below.