Lead Forensics
Prettys Solicitors Ipswich
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Concurrent delay and extension of time provisions

October 2017 - Issue 98

Concurrent delay is known as a period of delay caused by actions of both an employer and a contractor at the same time. An argument subsequently arises as the contractor submits it is entitled to an extension of time as a result of the employer’s delay, and the employer arguing its entitlement to liquidated damages as a result of the contractor’s delay.                

However, the recent case of Saga Cruises BDF Limited v Fincantieri SPA 2016 EWHC 1875, has held the principle of ‘concurrent delay’ is not necessarily caused by two delays which have occurred within the same period of time. It is ultimately the precise wording of the extension of time provisions that will be important.

In this case, Fincantierie SPA (the Contractor) was instructed by Saga Cruises BDF Limited (Saga), to refurbish a cruise ship for the sum of €14.3 million. The aim was to refurbish the ship to become Saga’s flagship cruise liner.  The contracted work was to commence on 9 November 2011 and had a scheduled completion date of 17 February 2012. A liquidated damages clause imposed liquidated damages on the Contractor for any delay in completing the works, although the clause capped the liquidated damages at €770,000.

In the event, there was a delay and the Contractor did not complete and return the ship to Saga until 16 March 2012. Originally, delays were caused by strikes and therefore an agreement was reached to postpone the completion date to 2 March 2012, known as the “Trieste Agreement”, but Saga subsequently claimed €770,000 in liquidated damages for the Contractor’s delay between 2 March 2012 and completion on 16 March 2012. The Contractor argued that it was entitled to an extension of time and that no liquidated damages were due, since the concurrent delay had been caused by the actions of both the Contractor and Saga.

Instead, Saga relied on Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848, arguing that for concurrent delay to occur, the delays caused by both Saga and the Contractor must be really concurrent and the delays felt at the same time. Saga argued that the delays caused by them did not prevent the Contractor from completing its work.

So what were the delays?

Delay caused by Saga:

Total delay = 3 March 2012 → 14 March 2012

Delay caused by the Contractor:

Total delay = 3 March → 16 March 2012

So was there concurrent delay?

The court held there was not concurrent delay. Relying on Adyard Abu Dhabi v SD Marine Services [2011], the court specified that concurrent delay required two causes of delay of equal strength, the delays to be felt at the same time, and the delay relied on must prevent the Contractor from working, causing a delay.

It was held that Saga’s delays did not actually affect the Contractor’s ability to complete works by the completion date, because Saga’s delay was only until 14 March. Therefore, the Contractor could not rely on concurrent delay in order to request an extension of time for completion. Saga was awarded liquidated damages, capped at €770,000.

This case confirmed delays must be genuinely concurrent and have equal impact on the completion date in order to entitle a contractor to rely on the principle of concurrent delay and obtain an extension of time.

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