£121 Million Construction Project Delays Trigger Contract Dispute

Disputes over the precise meaning of construction contracts are sadly common and can become particularly bitter if projects are substantially delayed. That was certainly so in one case in which a £121 million hotel and flats development remained unfinished six months after it should have been completed.

The contract between the developer and the building contractor it had engaged to perform the work set out a detailed schedule of interim payments that would be made at various stages of the project. The development should have been completed by July 2015 and the dispute concerned the status of an application for payment of £23 million submitted by the contractor after that date.

The contractor argued that, despite the expiry of the contractual completion date, the developer’s obligation to make further interim payments had continued ad infinitum until completion of the project, whenever that might be. However, the High Court found that that was an impossible submission on a correct interpretation of the contract. The contractor had no right to make the disputed interim application or to be paid in respect of the same.