Sabic UK Petrochemicals Ltd v Punj Lloyd Ltd

Sabic UK Petrochemicals Ltd v Punj Lloyd Ltd

SABIC is entitled to statutory interest at the normal commercial rate of 2.5% from April 2009 to the date of judgment, and at the Judgments Act rate thereafter, as the correct approach is to assume the claimant would have had to borrow the withheld funds on normal commercial terms, regardless of its actual funding position. Contra-charging for bond monies is not justified as the bonds were properly called and accounted for in the calculation.

Parties
Claimant: SABIC UK Petrochemicals Limited (formerly Huntsman Petrochemicals (UK) Limited); Defendant: Punj Lloyd Limited; Defendant: Simon Carves Limited (In Administration)
Jurisdiction
England and Wales
Judgment Date
10 October 2013
Procedural Posture
Civil / Post Judgment Application for Interest
Outcome
Application for interest allowed
Legal Topics
Statutory Interest, Calculation of Interest, Damages, Bonds
Commercial Law Construction Law Statutory Interest Calculation of Interest Damages Bonds

Case Brief

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Parties

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

Claimant

Punj Lloyd Limited

Defendant

Simon Carves Limited (In Administration)

Defendant

Procedural Posture

Civil / Post Judgment Application for Interest

Legal Issues

  1. 1 Whether SABIC is entitled to statutory interest on sums awarded for completion costs
  2. 2 The appropriate rate and period for interest calculation
  3. 3 Whether interest should be reduced or contra-charged due to bond monies or SABIC's funding position

Ratio Decidendi

SABIC is entitled to statutory interest at the normal commercial rate of 2.5% from April 2009 to the date of judgment, and at the Judgments Act rate thereafter, as the correct approach is to assume the claimant would have had to borrow the withheld funds on normal commercial terms, regardless of its actual funding position. Contra-charging for bond monies is not justified as the bonds were properly called and accounted for in the calculation.

Court Disposition

Application for interest allowed

Orders

  • SABIC is awarded interest from April 2009 to date in the sum of £1,271,640.
  • Interest on the judgment sum to run from the date of judgment until payment at the Judgments Act 1838 rate.