Sabic UK Petrochemicals Ltd v Punj Lloyd Ltd

Sabic UK Petrochemicals Ltd v Punj Lloyd Ltd

SABIC was entitled to terminate the contract for SCL's persistent failure to exercise due diligence and for financial deterioration jeopardizing performance. The warning letter of 3 October 2008 was sufficient notice under the contract. SCL was not in repudiatory breach. SABIC's claim for costs to complete under clause 30.9 was not subject to the 20% limitation of liability cap, and the performance and advance payment bonds were to be brought into account before any cap. SABIC's claims for lost revenue were excluded by the contract. PLL/SCL's counterclaim for return of bond monies failed.

Parties
Claimant/defendant by Counterclaim: SABIC UK Petrochemicals Limited (formerly Huntsman Petrochemicals (UK) Limited); Defendant/claimant by Counterclaim: Punj Lloyd Limited; Second Claimant (by Counterclaim): Simon Carves Limited (In Administration)
Jurisdiction
England and Wales
Judgment Date
10 October 2013
Procedural Posture
Civil (commercial Construction Dispute) / Final Judgment After Full Trial
Outcome
Judgment for SABIC for £11,797,514, with statutory interest to be determined separately. PLL/SCL's counterclaim dismissed.
Legal Topics
Termination of Contract, Liquidated Damages, Performance Bonds, Advance Payment Guarantees, Due Diligence in Construction, Limitation of Liability, Implied Terms, Remedies for Breach, Quantum Meruit, Counterclaims
Contract Law Construction Law Commercial Law Termination of Contract Liquidated Damages Performance Bonds Advance Payment Guarantees Due Diligence in Construction +5 more

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Parties

SABIC UK Petrochemicals Limited (formerly Huntsman Petrochemicals (UK) Limited)

Claimant/defendant by Counterclaim

Punj Lloyd Limited

Defendant/claimant by Counterclaim

Simon Carves Limited (In Administration)

Second Claimant (by Counterclaim)

Procedural Posture

Civil (commercial Construction Dispute) / Final Judgment After Full Trial

Legal Issues

  1. 1 Whether SABIC was justified in terminating the contract for lack of due diligence and/or financial deterioration under the EPC contract.
  2. 2 Whether the warning letter of 3 October 2008 was sufficient notice under the contract.
  3. 3 Whether SCL/PLL was in repudiatory breach of contract.

Ratio Decidendi

SABIC was entitled to terminate the contract for SCL's persistent failure to exercise due diligence and for financial deterioration jeopardizing performance. The warning letter of 3 October 2008 was sufficient notice under the contract. SCL was not in repudiatory breach. SABIC's claim for costs to complete under clause 30.9 was not subject to the 20% limitation of liability cap, and the performance and advance payment bonds were to be brought into account before any cap. SABIC's claims for lost revenue were excluded by the contract. PLL/SCL's counterclaim for return of bond monies failed.

Court Disposition

Judgment for SABIC for £11,797,514, with statutory interest to be determined separately. PLL/SCL's counterclaim dismissed.

Orders

  • SABIC awarded £11,797,514 against PLL/SCL.
  • PLL/SCL's counterclaim for return of bond monies dismissed.