Kluwer Construction Blog

Whilst interest in the recent UK judgment in the case of City Inn v Shepherd Construction may be confined to these shores, it is sufficiently important in the UK construction arena to warrant a mention on this Blog. The level of interest generated by this case initially may seem disproportionate to the complexity of issues and the amounts of money at stake. But ever since the option to adjudicate became compulsory for all UK based “construction contracts” in 1996 (Under the Housing Grants, Construction & Regeneration Act – see opsi), there has been a distinct lack of relevant construction UK case law on matters such as causation and delay – as parties choose the quicker, cheap [...]

When an Owner comes after the Contractor for liquidated delay damages (LDs) after a project is completed late, the Contractor’s only substantive defense is to argue that the delay was excused by force majeure or Owner actions (naturally there may be procedural defenses, like timeliness). However, a recent decision by the United States Court of Federal Appeals for the Federal Circuit has erected a new requirement that the Contractor must first fulfill before it can assert its substantive defense. The decision in question is M. Maropakis Carpentry, Inc. v. United States, ___ F.3d ____, No. 2009-5024 (June 17, 2010). It holds that in order to dispute the basis for an LD assessment by the U [...]

The U.S. Supreme Court has been deciding cases regarding arbitration at (for them) a furious pace recently, and the latest decision (Rent-A-Center West, Inc. v. Jackson, 2010 WL 2471058 (June 21, 2010)) reconfirms the Court’s continued strong support for enforcing arbitration agreements as written, even where this deprives the courts of any significant role in determining threshold questions of arbitrability.

The Rent-A-Center decision is complex, and well illustrates the very fine distinctions being made in the U.S. law of arbitration, but which have the net effect of strengthening the arbitrators’ role at the expense of the courts. The underlying broader issue is whether it is for the [...]

On Monday, April 19, 2010, a federal judge in the Eastern District of Virginia handed down “the longest-ever prison sentence” for a Foreign Corrupt Practices Act (FCPA) violation. Charles Jumet was sentenced to 87 months in prison for conspiring to violate the FCPA and for making false statements to federal agents. Jumet, a vice president of Ports Engineering Consultants Corp. (PECC), pled guilty to paying over $200,000 in bribes to high-ranking Panamanian government officials between 1997 and 2003 in exchange for maritime contracts to maintain lighthouses and buoys along Panama’s waterways. (PECC’s president, John Warwick, also has pled guilty to the same conduct and is scheduled to [...]

Answer: when it’s an affirmation. Consider the questions which Shell raised in an appeal case recently decided by the High Court (commented on by Vincent Connor in his last post):

Shell’s position was that Centurion Petroleum Corporation was in repudiatory breach and that Shell had clearly “accepted” this repudiation. The problem they faced was that the arbitral tribunal had interpreted their letter notifying Centurion that their contract was at an end as an “affirmation” of the contract – an interpretation with a significant price tag attached. On appeal, Shell were asking the Court “what principle requires a clear election to terminate on the basis that a substantial sum is recoverable t [...]

When forced to litigate in the U.S., many businesses – especially multinational ones – prefer to be in federal rather than state court. The U.S. Supreme Court just made it a bit easier to fulfill that desire.

Most construction disputes are contract cases not involving federal law, so a federal court will only have jurisdiction if the suit involves more than $75,000 and is between citizens of different U.S. states. The key question is usually: where is a corporation a “citizen” for the purpose of determining whether such “diversity of citizenship” exists?

By statute, a corporation is a citizen of both the state (1) where it is incorporated, and (2) where it maintains its “pri [...]

Contractors and suppliers operating abroad often conclude contracts with agents, consultants and other intermediaries who assist them in tender processes as well as in negotiating and performing contracts. Typically, these consultancy agreements provide that disputes are to be submitted to arbitration. Most disputes concern the consultants’ entitlement to a fee. In these disputes, the principal often argues that the contract was illegal under the applicable law. This notably occurred in two cases which led to two recent decisions of the Swiss Federal Supreme Court on applications to set aside or revise arbitral awards.

In the first case, a Swiss and a Taiwanese party had entere [...]

In this, the second of my New Year updates, I would like to discuss two interesting cases which have recently been decided by the UK courts. The first is the UK Court of Appeal upholding of a first instance judgment and the comments that the Court made on the recoverability of damages under English contract law.

The case is Supershield Limited v Siemens Building Technologies FE Ltd. As a reminder, the basic test under English law is that a party will recover losses flowing from the breach that (i) arise naturally, in the usual course of things, or (ii) are losses which the parties may reasonably be taken to have contemplated when entering into the contract (the “Hadley v. Baxen [...]

*Guest Post by Michael E. Mitchell, McCarthy Tétrault LLP

The tendering and procurement process in Canada has traditionally been treated by the courts as a special area of contract law in which fairness and protecting the integrity of the tender process have been guiding principles.  Courts have implied terms into contract “A” bid contracts that have obliged owners to act fairly, and wide discretionary clauses have been interpreted narrowly to ensure the integrity of the tendering process.

Owners looking to maximize their control over the selection of contractors have continued to fine-tune instructions to bidders and attempt to limit their own liability.  How far will the courts go [...]

Opening the mailbox at my Hong Kong apartment block brings the usual array of bills, more bills, flyers and…what appear to be ‘notices’ (usually from my landlord): but as we know from the world of construction law, often it is argued that what is intended to be a ‘notice’ fails to meet up to the strict requirements of the contract.

Yet, how many reported cases are there where the notice provision is strictly enforced? Most commentators struggle to point to a decision where a contractor was deprived of his ability to claim an extension of time solely on the basis of non-compliance with a notice provision. The point sometimes seems more of academic interest than practical applicatio [...]