Cases - Motherwell Bridge Construction v Micafil Vakuumtechnik

Record details

Name

Motherwell Bridge Construction v Micafil Vakuumtechnik

Date

(2002)

Citation

CILL 1913

Keywords

FIDIC contracts - extentions of time - no contract signed

Summary

Here, the parties to a contract found themselves bound by the FIDIC extension of time procedures and rules without them necessarily having signed up to them. The case demonstrates both the difficulty in working out what the parties have contracted, if no contract is agreed and signed and the extent to which the English Courts will often go in order to establish that a contract has been agreed. In August 1997 Micafil wrote to Motherwell Bridge saying that it had been awarded the subcontract 'conditional upon ... both parties signing the formal contract consolidating all necessary commercial technical and operational requirements ...' Nevertheless, no formal contract was executed.

The court concluded, on the basis of the conduct of the parties, that the contract was formed by correspondence and discussions culminating in that August 1977 letter. As a consequence of their conduct, Judge Toulmin CMG QC held that the parties had agreed to conduct their relations within the spirit of FIDIC terms but not to be bound by the strict terms. This was even though there was no FIDIC subcontract available at the time. What this meant was that while Motherwell Bridge were entitled to claim an extension of time on grounds available under the FIDIC conditions they did not have to comply with the FIDIC procedural time limits.

Motherwell Bridge had accelerated and resequenced his work to overcome the effects of delay by Micafil. The court approached the problem in this way, they assessed whether the delay was on the critical path and if so, whether it was caused by Motherwell Bridge.

On the evidence, it was decided that the delays were on the critical path, but were not the fault of Motherwell Bridge. Accordingly, although it was not entitled to an extension to the date it actually did complete, Motherwell Bridge was entitled to an extension of time to the date it would have been likely to have completed the work had it not accelerated and attempted to mitigate the employer delay. It was also entitled to claim for prolongation costs.