Cases - Costain v Bechtel

Record details

Name

Costain v Bechtel

Date

[2005]

Citation

EWHC 1018

Keywords

Duty of the project manager to act impartially - NEC 3 contract - unfair contract administration

Summary

Jackson J in the TCC had to consider the project manager's role under an NEC-type contract. The contract was an amended NEC form target cost contract with a pain/gain mechanism and provided for:

'The Employer, the Contractor and the Project Manager act in the spirit of mutual trust and co-operation and so as not to prevent compliance by any of them with the obligations each is to perform under the Contract.' Core Clause 10.1

Over the course of the contract, the Costain consortium were concerned that Bechtel had deliberately adopted a policy of administering the contract unfairly and adversely to them. Bechtel argued that the project manager was obliged to look after the employer's best interests and therefore owed no duty to act impartially in respect of consideration of the payment applications. The judge disagreed and held that the project manager did owe a duty to act impartially between the employer and the contractor.