“...In the event of any divergence between the Sub-Contractor Order and the documents expressly referred to therein…the Standard Sub-Contract Conditions and the terms and conditions of the Principal Contract, then the Sub-Contractor Order Documents shall prevail over the Standard Sub-Contract Conditions and the Standard Conditions of Sub-Contract shall prevail over the terms and conditions of the Principal Contract.”
“If the Sub-Contractor is insolvent, the Contractor may at any time by notice to the Sub-Contractor terminate the Sub-Contractor’s employment under this Sub-Contract.”
“7.7.3 The provisions of clause 7.7.4 shall thereupon apply and the other provisions of this Sub-Contract which require any further payment or any release of Retention to the Sub-Contractor shall cease to apply. (“Clause 7.7.3”) 7.7.4 Upon completion of the Sub-Contract Works and the making good of defects of the kind referred to in clause 2.22 or earlier termination of the Contractor’s employment, however arising, the Sub-Contractor may apply to the Contractor and the Contractor shall pay to the Sub-Contractor the value of any work executed or goods and materials supplied by the Sub-Contractor to the extent not included in previous payments. Without prejudice to his other rights, the Contractor may deduct therefrom the amount of any direct loss and/or damage caused to the Contractor as a result of the termination and any other amounts payable to the Contractor under this Sub-Contract. To the extent that the amounts due to the Contractor exceed the amounts due to the Sub-Contractor the balance shall be recoverable from the Sub-Contractor as a debt.”
“5.4 The Arbitrator is not bound by the strict rules of evidence and shall determine the admissibility, relevance or weight of any material sought to be tendered on any matters of fact or opinion by any party.”
“L Burden of Proof 1. Before considering the issues, I remind myself of the incidence of the burden of proof, and the practical consequences of that burden in relation to the issues in dispute 2. The Party which bears that burden is required to prove its claim to the ordinary civil standard, namely balance of probabilities. 3. Applying that principle to the issues in dispute in this Arbitration means, in practical terms, as follows:- … • In relation to the valuation of the Claimant's work at termination, in respect of which the Claimant contends for one figure and the Respondent contends for a lesser figure, the legal burden falls on the Claimant to prove the value of any work which it carried out but for which it has yet to be paid, and for which it is therefore entitled to payment in accordance with the “first limb” of Clause 7. 7.4 • However, since, three weeks prior to termination, the Respondent produced a valuation of the Claimant's work which was significantly higher than the valuation for which it now contends, the evidential burden falls on the Respondent to show, as it has endeavoured to do, why that earlier valuation was erroneously high • In relation to the sums which the Respondent says it is entitled, in accordance with the “second limb” of Clause 7.7.4 to deduct from any balance due under the “first limb” and/or recover from the Claimant, the burden falls on the Respondent to prove that the Claimant is responsible, in terms of both liability and quantum for each such sum…” • In relation to the valuation of the Claimant's work at termination, in respect of which the Claimant contends for one figure and the Respondent contends for a lesser figure, the legal burden falls on the Claimant to prove the value of any work which it carried out but for which it has yet to be paid, and for which it is therefore entitled to payment in accordance with the “first limb” of Clause 7. 7.4 • However, since, three weeks prior to termination, the Respondent produced a valuation of the Claimant's work which was significantly higher than the valuation for which it now contends, the evidential burden falls on the Respondent to show, as it has endeavoured to do, why that earlier valuation was erroneously high • In relation to the sums which the Respondent says it is entitled, in accordance with the “second limb” of Clause 7.7.4 to deduct from any balance due under the “first limb” and/or recover from the Claimant, the burden falls on the Respondent to prove that the Claimant is responsible, in terms of both liability and quantum for each such sum…”
“What was the value of work etc completed by the Claimant at the date of termination for which it has yet to receive payment?...”
“Sub-issue No 8 .1. Interest Rate N238 The Claimant submits that in the absence of any contractual remedy for late payment, it is entitled to compensation and interest pursuant to terms implied by theLate Payment of Commercial Debts (Interest) Act 1998 ("Late Payment Act") and the Regulations made there-under. N239 The Respondent says that there is an adequate contractual remedy for late payment, that remedy being set out in Clause 4.10.5, and so the terms of the Late Payment Act are not implied. N240 If I find that the Claimant is correct, it will have an entitlement to a fixed sum compensation payment and simple interest (calculated in the manner detailed below) at 8½% per annum. N241 If I find that the Respondent is correct, then the Claimant will be entitled to simple interest (calculated in the manner detailed below) at 5½% per annum and will have no entitlement to any fixed sum as compensation N242 Clause 15.9, which takes precedence over the JCT conditions, provides an “optional” regime for the payment of interest which the Parties agree is not an “adequate remedy” as defined by the Late Payment Act, and so must be declared void. N243 Where they part company is in relation to the consequence of Clause 15.9 being declared void. N244 The Claimant argues that if the clause is declared void, then there is no express contractual provision for interest, and so the Late Payment Act operates as the default. N245 The Respondent argues that if the clause is declared void, then there is no divergence between it and Clause 4.10.5 and it simply falls away. N246 I believe the Respondent's analysis is flawed and so prefer that of the Claimant. N247 The flaw arises as a result of timing. N248 Clause 15.9 cannot be declared to be void until after it has become a term of the Sub-contract. N249 Thus, before Clause 15.9 had been declared void, it had been incorporated into the Sub-contract in place of Clause 4.10.5, which was thereby deleted. N250 Clause 15.9 was then declared void. N251 However, since Clause 4.10.5 no longer stood as part of the Sub-contract, it could not (without the Parties' agreement) be reinstated and relied upon as if it had not been deleted; there was simply nothing to reinstate. N252 Thus, I find, as the Claimant correctly submits, that once Clause 15.9 was declared void, there was no contractual remedy for late payment and the provisions of the Late Payment Act were thereupon implied.”
“3. Nature of the review As to the remaining question, namely the nature of the review undertaken on questions of law, there is no doubt. Once satisfied that the decision is one in respect of which there is power to intervene, the Court will simply measure the decision against the facts, and if its own judgment differs from that of the arbitrator, the latter will yield. There is no question of exercising a discretion. The Court decides whether the arbitrator was right or wrong, and gives judgment accordingly, although weight is attached to the findings of arbitrators experienced in the trade in question.”
“7. APPEAL ON A QUESTION OF LAW Introduction…It has been said there are three principles relevant to the overall approach. First, as a matter of general approach, the courts strive to uphold arbitration awards. Secondly, the approach is to read an arbitration award in a reasonable and commercial way, expecting, as is usually the case, that there will be no substantial fault that can be found with it. Thirdly, not only will the court not be astute to look for defects, but in cases of uncertainty it will so far as possible construe the award in such a way as to make it valid rather than invalid.”
“15. … there are four principles which a court needs to keep carefully in mind. First as a matter of general approach, the courts strive to uphold awards. This means that, when looking at an award, it has to be read in a reasonable and commercial way, rather than with a view to picking holes, or finding inconsistencies or faults, in a tribunal’s reasoning…This is particularly so when the tribunal comprises market men, since one is entitled to expect from traded arbitrators the accuracy of wording, of cogency of expression, which is required of a judge… . Secondly, where a tribunal’s experience assists it in determining a question of law, such as the interpretation of contractual documents, the court will accord some defence to the tribunal’s decision on that question. It will reverse the decision only if satisfied that, despite the benefit of that experience, the tribunal has still come to the wrong answer… . Thirdly, it is for the tribunal to make the findings of fact in relation to any dispute and any question of law arising from an Award must be decided on the basis of a full and unqualified acceptance of the findings of fact of the arbitrators : see The “Baleares”[1993] 1 Lloyd’s Rep 215 at 228 which makes clear that this is so regardless of whether the court thinks a finding of fact was right or wrong. Fourthly, when a tribunal has reached a conclusion of mixed fact and law, the court cannot interfere with that conclusion just because it would not have reached the same conclusion itself. It can interfere only when convinced that no reasonable person, applying the correct legal test, could have reached the conclusion which the tribunal did: or, to put it another way, it has to be shown that the tribunal’s conclusion was necessarily inconsistent with the application of the right test: The “Sylvia”[2010] 2 Lloyd’s Rep 81 at [54]-[55]. The same extremely circumscribed power of intervention applies when it is complained that a tribunal has incorrectly applied the law to the facts. It is only if the correct application of the law leads inevitably to one answer, and the tribunal has given another, that the court can interfere. Once a court has concluded that a tribunal which correctly understood the law could have arrived at the same answer as the one reached by the arbitrator, the fact that the individual judge himself would have come to a different conclusion is no ground for disturbing the Award: The Chrysalis[1983] 1 Lloyd’s Rep 503 at 507.”
“The arbitrators are masters of the facts. On an appeal the court must decide any question of law arising from the award based on a full and unqualified acceptance of the findings of fact of the arbitrators. It is irrelevant whether the court considers those findings of fact to be right or wrong. It also does not matter how obvious a mistake by the arbitrators on issues of fact might be or what the scale of the financial consequences of the mistake of fact might be.”
“484. One needs to be careful in using the expressions “global” or “total” cost claims. These are not terms of art or statutorily defined terms. Some of the cases…were concerned with linking actual delay and the alleged causes of delay. Simply because a contractor claims all the costs on a construction project which it has not yet been paid does not necessarily mean that the claim is a global or a total cost claim, although it may be. What is commonly referred to as a global claim is a contractor’s claim which identifies numerous potential or actual causes of delay and/or disruption, a total cost on the job, a net payment from the employer and a claim for the balance between costs and payment which is attributed without more and by inference to the causes of delay and disruption relied on…”
“486. Drawing together all the relevant threads together, it can properly be concluded as follows in relation to “global” or “total” cost claims: (a) Ultimately, claims by contractors for delay or disruption related loss and expense must be proved as a matter of fact. Thus, the Contractor has to demonstrate on a balance of probabilities that, first, events occurred which entitle it to loss and expense, secondly, that those events caused delay and/or disruption and thirdly that such delay or disruption caused it to incur loss and/or expense (or loss and damage as the case may be). I do not accept that, as a matter of principle, it has to be shown by a claimant contractor that it is impossible to plead and prove cause and effect in the normal way or that such impossibility is not the fault of the party seeking to advance the global claim. One needs to see of course what the contractual clause relied upon says to see if there are contractual restrictions on global cost or loss claims. Absent and subject to such restrictions, the claimant contractor simply has to prove its case on a balance of probabilities… (c)It is open to contractors to prove these three elements with whatever evidence will satisfy the tribunal and the requisite standard of proof. There is no set way for contractors to prove these three elements. For instance, such a claim may be supported or even established by admission evidence or by detailed factual evidence which precisely links reimbursable events with individual days or weeks of delay or with individual instances of disruption and which then demonstrates with precision to the nearest penny what that delay or disruption actually cost. (d) There is nothing in principle “wrong” with a “total” or “global” cost claim. However, there are added evidential difficulties (in many but not necessarily all cases) which a claimant contractor has to overcome. It will generally have to establish (on a balance of probabilities) that the loss which it has incurred (namely the difference between what it has cost the contractor and what it has been paid) would not have been incurred in any event. Thus, it will need to demonstrate that its accepted tender was sufficiently well priced that it would have made some net return. It will need to demonstrate in effect that there are no other matters which actually occurred (other than those relied upon in its pleaded case and which it has proved are likely to have caused the loss)… (e) The fact that one or a series of events or factors (un-pleaded or which are the risk or fault of the claimant contractor) caused or contributed (or cannot be proved not to have caused or contributed) to the total or global loss does not necessarily mean that the claimant contractor can recover nothing. It depends on what the impact of those events or factors is… (f) Obviously, there is no need for the Court to go down the global or total cost route if the actual cost attributable to individual loss causing events can be readily or practicably determined. I do not consider that Vinelott J was saying in the Merton case (at page 102 last paragraph) that a contractor should be debarred from pursuing what he called a "rolled up award" if it could otherwise seek to prove its loss in another way. It may be that the tribunal will be more sceptical about the global cost claim if the direct linkage approach is readily available but is not deployed. That does not mean that the global cost claim should be rejected out of hand.” (a) Ultimately, claims by contractors for delay or disruption related loss and expense must be proved as a matter of fact. Thus, the Contractor has to demonstrate on a balance of probabilities that, first, events occurred which entitle it to loss and expense, secondly, that those events caused delay and/or disruption and thirdly that such delay or disruption caused it to incur loss and/or expense (or loss and damage as the case may be). I do not accept that, as a matter of principle, it has to be shown by a claimant contractor that it is impossible to plead and prove cause and effect in the normal way or that such impossibility is not the fault of the party seeking to advance the global claim. One needs to see of course what the contractual clause relied upon says to see if there are contractual restrictions on global cost or loss claims. Absent and subject to such restrictions, the claimant contractor simply has to prove its case on a balance of probabilities… (c)It is open to contractors to prove these three elements with whatever evidence will satisfy the tribunal and the requisite standard of proof. There is no set way for contractors to prove these three elements. For instance, such a claim may be supported or even established by admission evidence or by detailed factual evidence which precisely links reimbursable events with individual days or weeks of delay or with individual instances of disruption and which then demonstrates with precision to the nearest penny what that delay or disruption actually cost. (d) There is nothing in principle “wrong” with a “total” or “global” cost claim. However, there are added evidential difficulties (in many but not necessarily all cases) which a claimant contractor has to overcome. It will generally have to establish (on a balance of probabilities) that the loss which it has incurred (namely the difference between what it has cost the contractor and what it has been paid) would not have been incurred in any event. Thus, it will need to demonstrate that its accepted tender was sufficiently well priced that it would have made some net return. It will need to demonstrate in effect that there are no other matters which actually occurred (other than those relied upon in its pleaded case and which it has proved are likely to have caused the loss)… (e) The fact that one or a series of events or factors (un-pleaded or which are the risk or fault of the claimant contractor) caused or contributed (or cannot be proved not to have caused or contributed) to the total or global loss does not necessarily mean that the claimant contractor can recover nothing. It depends on what the impact of those events or factors is… (f) Obviously, there is no need for the Court to go down the global or total cost route if the actual cost attributable to individual loss causing events can be readily or practicably determined. I do not consider that Vinelott J was saying in the Merton case (at page 102 last paragraph) that a contractor should be debarred from pursuing what he called a "rolled up award" if it could otherwise seek to prove its loss in another way. It may be that the tribunal will be more sceptical about the global cost claim if the direct linkage approach is readily available but is not deployed. That does not mean that the global cost claim should be rejected out of hand.”
“1(1) It is an implied term in a contract to which this Act applies that any qualifying debt created by the contract carries simple interest subject to and in accordance with this Part… 8(1) Any contract terms are void to the extent that they purport to exclude the right to statutory interest in relation to the debt, unless there is a substantial contractual remedy for late payment of the debt. (2) Where the parties agree a contractual remedy for late payment of the debt that is a substantial remedy, statutory interest is not carried by the debt (unless they agree otherwise). (3) The parties may not agree to vary the right to statutory interest in relation to the debt unless either the right to statutory interest as varied or the overall remedy for late payment of the debt is a substantial remedy. (4) Any contract terms are void to the extent that they purport to— (a) confer a contractual right to interest that is not a substantial remedy for late payment of the debt, or (b) vary the right to statutory interest so as to provide for a right to statutory interest that is not a substantial remedy for late payment of the debt, unless the overall remedy for late payment of the debt is a substantial remedy. (5) Subject to this section, the parties are free to agree contract terms which deal with the consequences of late payment of the debt. … 9(1) A remedy for the late payment of the debt shall be regarded as a substantial remedy unless— (a) the remedy is insufficient either for the purpose of compensating the supplier for late payment or for deterring late payment; and (b) it would not be fair or reasonable to allow the remedy to be relied on to oust or (as the case may be) to vary the right to statutory interest that would otherwise apply in relation to the debt. (2) In determining whether a remedy is not a substantial remedy, regard shall be had to all the relevant circumstances at the time the terms in question are agreed. (3) In determining whether subsection (1)(b) applies, regard shall be had (without prejudice to the generality of subsection (2)) to the following matters— (a) the benefits of commercial certainty; (b) the strength of the bargaining positions of the parties relative to each other; (c) whether the term was imposed by one party to the detriment of the other (whether by the use of standard terms or otherwise); and (d) whether the supplier received an inducement to agree to the term.” (a) confer a contractual right to interest that is not a substantial remedy for late payment of the debt, or (b) vary the right to statutory interest so as to provide for a right to statutory interest that is not a substantial remedy for late payment of the debt, unless the overall remedy for late payment of the debt is a substantial remedy. (a) the remedy is insufficient either for the purpose of compensating the supplier for late payment or for deterring late payment; and (b) it would not be fair or reasonable to allow the remedy to be relied on to oust or (as the case may be) to vary the right to statutory interest that would otherwise apply in relation to the debt. (a) the benefits of commercial certainty; (b) the strength of the bargaining positions of the parties relative to each other; (c) whether the term was imposed by one party to the detriment of the other (whether by the use of standard terms or otherwise); and (d) whether the supplier received an inducement to agree to the term.”
“a) Clause 15.9 of the Sisk Conditions provided: “If Sisk fails to pay in full any sum properly due hereunder by the final date for payment, Sisk may (but shall not be obliged to) pay interest thereon from the final date for payment until payment of such sum is made.” (“Clause 15.9”); Clause 4.9 of the JCT Conditions provided : Issue of interim payments 4.9.1 The first interim payment shall be due on the date for issue of the Interim Certificate under the Main Contract immediately following the commencement of the Sub-Contract works. If no date for the issue of Interim Certificates under the Main Contract is stated in the Main Contract Particulars, the first payment shall in any event be due not later than one month after the date of commencement of the Sub-Contract Works on site. 4.9.2 Interim payments shall thereafter be due on the same date in each month as that on which the first payment became due, or on the nearest Business Day in that month, up to and including the month following the date of practical completion of the Sub-Contract works as a whole. Thereafter, as and when further amounts are ascertained as due and payable interim payments shall be due on the same date in each month or the nearest Business Day in that month. 4.9.3 The final date for payment of interim payments shall be 21 days after the date on which they become due.” (“Clause 4.9”); Clause 4.10.5 of the JCT Conditions provided : Interim payments – amounts due 4.10.1 Subject to any agreement between the Sub-Contractor and the Contractor as to stage payments, the amount of each interim payment shall be the Contractor’s Gross Valuation as referred to in clause 4.13 less : .1 any amount which may be deducted and retained as Retention by the Contractor in respect of the Sub- Contract Works in accordance with clause 4.15; and .2 the total amount previously due as interim payments under this Sub-Contract. .2 Not later than 5 days on which an interim payment becomes due the Contractor shall give a written notice to the Sub-Contractor which shall specify the amount of the payment which is proposed to be made in respect of the Sub-Contract Works, to what the amount of the payment relates and the basis on which that amount was calculated. .3 Not later than 5 days before the final date for payment of an interim payment the Contractor may give a written notice to the Sub-Contractor which shall specify any amount proposed to be withheld and/or deducted from the amount notified under clause 4.10.2, the ground or grounds for such withholding and/or deduction and the amount of withholding and/or deduction attributable to each ground. .4 Subject to any notice given under clause 4.10.3, the Contractor shall no later than the final date for payment pay the amount specified in his notice given under clause 4.10.2 or, in the absence of a notice under clause 4.10.2, the amount calculated in accordance with clause 4.10.1. ... 5 If the Contractor fails properly to pay the amount, or any part of it, due to the Sub-Contractor under these Conditions by the final date for its payment, the Contractor shall pay to the Sub-Contractor in addition to the amount not properly paid simple interest thereon at the Interest Rate for the period until such payment is made. Payment of such interest shall be treated as a debt due to the Sub-Contractor by the Contractor…” (“Clause 4.10.5”); Clause 4.12 of the JCT Conditions provided : Final Payment 4.12.1 The amount of the Final Payment to the Sub-Contractor shall be the Final Sub-Contract Sum, which shall be calculated by the Contractor in accordance with which of clause 4.3 or 4.4 applies, less only the total amount previously due as interim payments under this Sub-Contract… 4.12.4 If the Contractor fails properly to pay the amount, or any part of it, by the final date for its payment the Contractor shall pay in addition to the amount no properly paid simple interest thereon at the Interest Rate for the period until such payment is made. Payment of such interest shall be treated as a debt due to the Sub-Contractor by the Contractor. The acceptance of any payment of interest under this clause 4.12.14 shall not in any circumstances be construed as a waiver by the Sub-Contractor to his right to proper payment of the amount due.”
“In the Sub-Contract Agreement and these Conditions, unless the context otherwise requires: .1 the headings are included for convenience only and shall not affect the interpretation of this Sub-Contract…”
“.3 The provisions of clause 7.7.4 shall thereupon apply and the other provisions of this Sub-Contract which require any further payment or any release of Retention to the Sub-Contractor shall cease to apply.”