Alstom Signalling Ltd. (t/a Alstom Transport Information Solutions) v Jarvis Facilities Ltd

Alstom Signalling Ltd. (t/a Alstom Transport Information Solutions) v Jarvis Facilities Ltd

The parties concluded a binding sub-contract in the terms of the Issue 3 documents, which included an agreement in principle to a pain/gain sharing mechanism but left the details unresolved. The absence of a finalised pain/gain mechanism did not render the sub-contract unenforceable or incomplete. By virtue of the dispute resolution clause, the court is empowered to determine the fair and reasonable pain/gain mechanism to apply. The court declined to impose either party's preferred mechanism without further submissions, but held that Jarvis must participate in pain/gain sharing on a fair and reasonable basis to be determined by the court if not agreed.

Parties
Claimant: Alstom Signalling Limited (trading as Alstom Transport Information Solutions); Defendant: Jarvis Facilities Limited
Jurisdiction
England and Wales
Judgment Date
11 May 2004
Procedural Posture
Commercial Construction Dispute / Judgment After Trial on Liability
Outcome
Declaration granted (in modified form); determination of pain/gain mechanism deferred for further submissions.
Legal Topics
Sub Contract Formation, Agreement to Agree, Quantum Meruit, Pain/gain Mechanisms, Uncertainty in Contract Terms
Contract Law Construction Law Sub Contract Formation Agreement to Agree Quantum Meruit Pain/gain Mechanisms Uncertainty in Contract Terms

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Parties

Alstom Signalling Limited (trading as Alstom Transport Information Solutions)

Claimant

Jarvis Facilities Limited

Defendant

Procedural Posture

Commercial Construction Dispute / Judgment After Trial on Liability

Legal Issues

  1. 1 Whether the sub-contract between Alstom and Jarvis included a binding pain/gain sharing mechanism
  2. 2 Whether the absence of an agreed pain/gain mechanism rendered the sub-contract unenforceable
  3. 3 Whether the court has power to determine the pain/gain mechanism under the dispute resolution clause

Ratio Decidendi

The parties concluded a binding sub-contract in the terms of the Issue 3 documents, which included an agreement in principle to a pain/gain sharing mechanism but left the details unresolved. The absence of a finalised pain/gain mechanism did not render the sub-contract unenforceable or incomplete. By virtue of the dispute resolution clause, the court is empowered to determine the fair and reasonable pain/gain mechanism to apply. The court declined to impose either party's preferred mechanism without further submissions, but held that Jarvis must participate in pain/gain sharing on a fair and reasonable basis to be determined by the court if not agreed.

Court Disposition

Declaration granted (in modified form); determination of pain/gain mechanism deferred for further submissions.

Orders

  • Declaration that the sub-contract included an agreement to pain/gain sharing but no mechanism was agreed; court to determine mechanism if parties cannot agree.
  • Parties invited to make further submissions or agree a mechanism; if not, court will issue an addendum judgment.