Henry Boot Construction Ltd. v Alstom Combined Cycles Ltd.

Henry Boot Construction Ltd. v Alstom Combined Cycles Ltd.

The right to payment under the contract arises when a certificate is issued or ought to be issued, not when the work is done. Failure to include a sum in a final certificate gives rise to a new cause of action, distinct from any cause of action arising from interim certificates. Claims for interest on overdue payments are statute-barred six years after the right to interest accrues. Certificates are a condition precedent to payment, but arbitrators or courts can grant relief as if a certificate had been issued if it was wrongfully withheld.

Parties
Appellant/claimant: Henry Boot Construction Ltd; Respondent/defendant: Alstom Combined Cycles Ltd
Jurisdiction
England and Wales
Judgment Date
16 June 2005
Procedural Posture
Civil Appeal (from Arbitration Award) / Court of Appeal Judgment
Outcome
Appeal allowed in part; Alstom successful on the limitation of interest claims (third issue); leave to appeal to the House of Lords refused; costs awarded as specified.
Legal Topics
Limitation of Actions, Construction Contracts, Interim and Final Payments, Certification, Interest on Overdue Payments
Construction Law Contract Law Arbitration Limitation of Actions Construction Contracts Interim and Final Payments Certification Interest on Overdue Payments

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Parties

Henry Boot Construction Ltd

Appellant/claimant

Alstom Combined Cycles Ltd

Respondent/defendant

Procedural Posture

Civil Appeal (from Arbitration Award) / Court of Appeal Judgment

Legal Issues

  1. 1 When does a cause of action arise for interim and final payments under a construction contract?
  2. 2 Are certificates a condition precedent to payment?
  3. 3 Does failure to include a sum in a final certificate give rise to a new cause of action?

Ratio Decidendi

The right to payment under the contract arises when a certificate is issued or ought to be issued, not when the work is done. Failure to include a sum in a final certificate gives rise to a new cause of action, distinct from any cause of action arising from interim certificates. Claims for interest on overdue payments are statute-barred six years after the right to interest accrues. Certificates are a condition precedent to payment, but arbitrators or courts can grant relief as if a certificate had been issued if it was wrongfully withheld.

Court Disposition

Appeal allowed in part; Alstom successful on the limitation of interest claims (third issue); leave to appeal to the House of Lords refused; costs awarded as specified.

Orders

  • Appeal allowed except as to the limitation on interest claims under clause 60(7), where Alstom succeeded.
  • No order as to costs attributable to the clause 60(7) issue incurred after 13 April 2005.