Network Rail Infrastructure Ltd v ABC Electrification Ltd [2019] EWHC 1769 (TCC) (08 July 2019)

Network Rail Infrastructure Ltd v ABC Electrification Ltd [2019] EWHC 1769 (TCC) (08 July 2019)

The word 'default' in clause 1(1)(j)(iii) of the contract carries its natural and ordinary meaning, namely any failure by ABC to comply with its obligations under the contract. There is no contractual, contextual, or commercial basis to restrict 'default' to only wilful and deliberate failures. Accordingly, Disallowed Cost includes any cost due to any such failure.

Citation
[2019] EWHC 1769 (TCC)
Parties
Claimant: Network Rail Infrastructure Limited; Defendant: ABC Electrification Limited
Jurisdiction
England and Wales
Judgment Date
08 July 2019
Procedural Posture
Part 8 Claim (interpretation of Contract) / Judgment After Hearing
Outcome
Declarations granted in favour of Network Rail Infrastructure Limited.
Legal Topics
Interpretation of Contract Terms, Declaratory Relief, Construction Contracts, Disallowed Cost Provisions
Contract Law Construction Law Interpretation of Contract Terms Declaratory Relief Construction Contracts Disallowed Cost Provisions

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Parties

Network Rail Infrastructure Limited

Claimant

ABC Electrification Limited

Defendant

Procedural Posture

Part 8 Claim (interpretation of Contract) / Judgment After Hearing

Legal Issues

  1. 1 What is the correct interpretation of 'default' in clause 1(1)(j)(iii) of the contract?
  2. 2 Does 'Disallowed Cost' include any cost due to any failure by ABC to comply with its obligations under the contract, or only wilful and deliberate failures?

Ratio Decidendi

The word 'default' in clause 1(1)(j)(iii) of the contract carries its natural and ordinary meaning, namely any failure by ABC to comply with its obligations under the contract. There is no contractual, contextual, or commercial basis to restrict 'default' to only wilful and deliberate failures. Accordingly, Disallowed Cost includes any cost due to any such failure.

Court Disposition

Declarations granted in favour of Network Rail Infrastructure Limited.

Orders

  • Declaration that 'Disallowed Cost' in clause 1(1)(j)(iii) includes any cost due to any failure by ABC to comply with its obligations under the contract.
  • Declaration that costs incurred due to failures by ABC to start or proceed with the works with due expedition, or to complete within the stated time, are Disallowed Costs.