Cleveland Bridge UK Ltd v Sarens (UK) Ltd

Cleveland Bridge UK Ltd v Sarens (UK) Ltd

The parties did not reach a concluded agreement on the provision for delay or liquidated damages in the subcontract; Paragraph 10 of the proposed subcontract was never agreed, and there was no subsequent agreement as to a mechanism for liquidated damages. Sarens' arguments based on estoppel by representation or convention also fail, as there was no clear representation or shared assumption on which Sarens relied to its detriment. The indemnity clause in the subcontract is not limited to third parties other than Costain and can, in principle, cover liabilities to Costain, including sums paid under a settlement agreement, subject to the facts of any particular claim.

Parties
Claimant: Cleveland Bridge UK Limited; Defendant: Sarens (UK) Limited
Jurisdiction
England and Wales
Judgment Date
10 April 2018
Procedural Posture
Commercial Construction Dispute / Final Judgment After Trial
Outcome
Claim allowed in part; counterclaim dismissed
Legal Topics
Formation of Contract, Interpretation of Contract Terms, Liquidated Damages, Delay Damages, Estoppel, Subcontractor Liability
Contract Law Construction Law Formation of Contract Interpretation of Contract Terms Liquidated Damages Delay Damages Estoppel Subcontractor Liability

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Parties

Cleveland Bridge UK Limited

Claimant

Sarens (UK) Limited

Defendant

Procedural Posture

Commercial Construction Dispute / Final Judgment After Trial

Legal Issues

  1. 1 Whether the parties agreed to a cap on delay/liquidated damages in the subcontract and, if so, its terms and application
  2. 2 Whether a term limiting Sarens' liability for delay/liquidated damages to 10% of the subcontract price was agreed
  3. 3 Whether any mechanism for the imposition of liquidated damages was agreed

Ratio Decidendi

The parties did not reach a concluded agreement on the provision for delay or liquidated damages in the subcontract; Paragraph 10 of the proposed subcontract was never agreed, and there was no subsequent agreement as to a mechanism for liquidated damages. Sarens' arguments based on estoppel by representation or convention also fail, as there was no clear representation or shared assumption on which Sarens relied to its detriment. The indemnity clause in the subcontract is not limited to third parties other than Costain and can, in principle, cover liabilities to Costain, including sums paid under a settlement agreement, subject to the facts of any particular claim.

Court Disposition

Claim allowed in part; counterclaim dismissed

Orders

  • Declarations and consequential orders to be determined after further submissions if not agreed by the parties