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New Commercial Court Guidance: Concurrent delays

September 2016 - Issue 85

In Saga Cruises BDF Ltd and another v Fincantieri SPA [2016] EWHC 1875, the High Court awarded liquidated damages for delay in favour of a ship-owner after reviewing the existing authority on concurrent delay.

Saga Cruises (the “Ship-Owners”) contracted with Fincantieri (the “Shipyard”) for both engineering and outfitting works for the refurbishment of a cruise ship. This was due to be completed by 2 March 2012 but was not completed until two weeks later. As such, the Ship-Owners sought to recover liquidated damages for the delay.

The Shipyard argued that it was prevented from completing the works by the deadline due to the delays on part of the Ship-Owners. This included the fact that during the works it was discovered that new installation was required due to defective flooring carried out by another party on behalf of the Ship-Owners. The defective flooring was not repaired until between 2 and 10 March 2012 and so the Shipyard argued that it could not have achieved the completion date of 2 March 2012 in any event.

The Shipyard’s defence to the liquidated damages claim failed and the court held that the Ship-Owner’s delays had included the Shipyard’s own delays which had persisted up until the actual completion date of 16 March 2016. It was held that the Ship-Owner’s delays had not caused an additional delay to completion which was not already accounted for by the Shipyard’s delays.

The judgement demonstrates that unless there is concurrency which actually affects the completion date as agreed, then the contractor cannot claim the benefit of it. It is important to distinguish between

  1. a delay, which would have caused a delay had the contractor not been delayed but because of an existing delay made no difference; and
  2. those delays where further delay is actually caused by the event relied on.

The approach to these types of cases has been criticised due to the uncertainty and the simplistic approach by the courts. Thus, it still remains uncertain as to how this decision will be followed by the Technology and Construction Court in the future.

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I would not hesitate to recommend their services, in particular, Rebecca Palmer." - Sharon Hosegood, Sharon Hosegood Associates.

Rebecca Palmer

Senior Associate

e rpalmer@prettys.co.uk

t 01473 298274

 

 

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