Damages and partial possession

The Technology and Construction Tribunal (TCC) at
Background
Following the CP, a dispute arose as to the level of the applicable LDs
Mechanism of LD
The Contract provided for LOs in the event of Dobler’s delay (clause 2.32.1). It provided for an initial grace period of four weeks, then a capped weekly amount: “Lump-sum damages will apply thereafter at the rate of 25,000 per week (or pro rata for part of the week) up to a global maximum of 7% of the final sum of the commercial contract …“
The relevant contractual notice to be issued for the DLs to be collected should specify whether the DLs were to be paid at the contractual rate, or at a “lower rate indicated in the notice“.
Action before the Technology and Construction Tribunal (TCC)
Three arbitrations took place between the parties. These included arguments on the extension of time, assessment and GLs.
Following the third decision, Eco initiated Part 8 proceedings before the TCC to resolve the following issues:
Positions of parties
Eco argued:
Dobler argued:
Decision
The CCT held:
Alternative argument regarding the ceiling
Although not necessary in view of the above conclusion, the ICC also considered Dobler’s alternative argument that even if the DL mechanism was null and / or inoperative, the ‘cap’ of clause s ‘would still apply to all general or unliquidated damages. An important factor to consider in this context would be whether the cap was intended to limit liability for late fees. Considering the Contract as a whole, the ICC has determined that the 7% cap in this case “would work as a limitation of liability provision, even if the damages were nil or a penalty“.
Therefore, even if Eco had succeeded in arguing that the LD clause was null and / or unenforceable, its claim for general damages would still have been subject to the 7% cap.
Points to remove
The lessons to be learned from this case are:
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
Sir
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