Southern Electricity Power Distribution PLC v OCU Modus Ltd [2025] EWHC 723 (TCC) (27 March 2025)

Southern Electricity Power Distribution PLC v OCU Modus Ltd [2025] EWHC 723 (TCC) (27 March 2025)

The court found that the works carried out by Modus were defective and failed to comply with the Adoption Agreement and good industry practice. The defects were extensive, affecting both the joints and the cables, and posed significant risks of future failure and safety concerns. The court held that SEPD's decision to replace the entire cable circuits, rather than undertake piecemeal joint repairs, was reasonable and proportionate in the circumstances, given the technical risks, the need for long-term reliability, and the commercial impact of outages. The costs incurred by SEPD for the full replacement were recoverable as reasonable costs under the contract.

Citation
[2025] EWHC 723 (TCC)
Parties
Claimant: Southern Electricity Power Distribution PLC; Defendant: OCU Modus Limited
Jurisdiction
England and Wales
Judgment Date
27 March 2025
Procedural Posture
TCC Commercial Construction Dispute / Final Judgment After Trial
Outcome
Judgment for the Claimant
Legal Topics
Defective Works, Measure of Damages, Mitigation of Loss, Causation, Remedial Works, Reasonableness of Reinstatement
Construction Law Contract Law Commercial Law Defective Works Measure of Damages Mitigation of Loss Causation Remedial Works +1 more

Case Brief

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Parties

Southern Electricity Power Distribution PLC

Claimant

OCU Modus Limited

Defendant

Procedural Posture

TCC Commercial Construction Dispute / Final Judgment After Trial

Legal Issues

  1. 1 Whether the works carried out by Modus were defective under the Adoption Agreement
  2. 2 Whether SEPD was entitled to recover the cost of full cable replacement as reasonable remedial works
  3. 3 Whether SEPD's remedial solution was proportionate and reasonable

Ratio Decidendi

The court found that the works carried out by Modus were defective and failed to comply with the Adoption Agreement and good industry practice. The defects were extensive, affecting both the joints and the cables, and posed significant risks of future failure and safety concerns. The court held that SEPD's decision to replace the entire cable circuits, rather than undertake piecemeal joint repairs, was reasonable and proportionate in the circumstances, given the technical risks, the need for long-term reliability, and the commercial impact of outages. The costs incurred by SEPD for the full replacement were recoverable as reasonable costs under the contract.

Court Disposition

Judgment for the Claimant

Orders

  • Modus to pay SEPD £2,642,237.71, comprising £188,909.96 for interim repairs and £2,453,327.75 for permanent replacement works.
  • Interest and costs to be assessed if not agreed.