Henry Boot Construction v Alston Combined Cycles [2000] EWCA Civ 99 (4 April 2000)

Henry Boot Construction v Alston Combined Cycles [2000] EWCA Civ 99 (4 April 2000)

The arbitrator erred in law by refusing to use the contract rate as the basis for valuation under Clause 52(1)(b) on the ground that it was based on a mistake. The reasonableness test in Clause 52(1)(b) refers to the comparability of the work, not to the correctness or origin of the rate. The existence of a mistake in the rate is irrelevant to the application of Clause 52(1)(b).

Citation
[2000] EWCA Civ 99
Parties
Appellant/contractor: Henry Boot Construction Limited; Respondent/employer: GEC Alstom Combined Cycles Ltd (GECA)
Jurisdiction
England and Wales
Judgment Date
04 April 2000
Procedural Posture
Appeal From Arbitration Award (question of Law Under Arbitration Act 1979) / Court of Appeal Judgment
Outcome
Appeal allowed; award remitted to arbitrator for reconsideration in accordance with the court's ruling.
Legal Topics
Valuation of Variations, Interpretation of Standard Form Contracts, Rectification of Contract Rates, Mistake in Contract Pricing, Role of Arbitrator in Valuation
Construction Law Contract Law Arbitration Valuation of Variations Interpretation of Standard Form Contracts Rectification of Contract Rates Mistake in Contract Pricing Role of Arbitrator in Valuation

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Parties

Henry Boot Construction Limited

Appellant/contractor

GEC Alstom Combined Cycles Ltd (GECA)

Respondent/employer

Procedural Posture

Appeal From Arbitration Award (question of Law Under Arbitration Act 1979) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether an arbitrator can refuse to use a contract rate as the basis for valuation under Clause 52(1)(b) of the ICE Conditions on the ground that the rate was based on a mistake or insufficient information.
  2. 2 Whether the reasonableness test in Clause 52(1)(b) permits consideration of the circumstances in which the rate was set, or is limited to the comparability of the work.

Ratio Decidendi

The arbitrator erred in law by refusing to use the contract rate as the basis for valuation under Clause 52(1)(b) on the ground that it was based on a mistake. The reasonableness test in Clause 52(1)(b) refers to the comparability of the work, not to the correctness or origin of the rate. The existence of a mistake in the rate is irrelevant to the application of Clause 52(1)(b).

Court Disposition

Appeal allowed; award remitted to arbitrator for reconsideration in accordance with the court's ruling.

Orders

  • Award remitted to arbitrator to make a valuation under Clause 52(1)(b) using the contract rate (£250,880) as the basis, subject to the arbitrator's assessment of sufficiency of information.