In response, the Yard relied on Malmaison(1990) and Walter Lilly (2012) for the proposition that, when there are two concurrent causes of delay, one of which would be a relevant event (i.e. an event entitling a contractor to an extension of time) would be a relevant event (i.e. an event entitling a contractor to an extension of time) and the other would not, the contractor is entitled to an extension of time for the relevant event notwithstanding the concurrent effect of the other event.
The Court rejected the Yard's approach as over-broad and held that the delays caused by the Owners did not operate so as to cancel out the delays of the Yard. When the Owners delays occurred, there were already items outstanding that were the responsibility of the Yard. Accordingly, the Yard could not then rely on a period of concurrency to disentitle the Owners from liquidated damages as a remedy for culpable delay.
Referring in particular to the analysis in the cases of Adyard Abu Dhabi (2011) and Balfour Beatty Building Ltd (1993), the Court concluded that: A careful consideration of the authorities indicates that unless there is a concurrency actually affecting the completion date as then scheduled the contractor cannot claim the benefit of it. Causation must in fact be proved based on the situation at the time as regards delay. The Yard's approach is over broad. The submissions of Owners are to be preferred.
In other words, a contractor should not be entitled to the benefit of a relevant event if it was already delayed such that the relevant event had no actual impact. A contractor must prove that the employer's risk relevant event caused delay.
Accordingly, the Saga Cruises case stands as a timely reminder that the principles on concurrent delay as outlined in the case of Walter Lilly cannot be applied as a blanket rule without assessing the timing of the delay events and considering the true causative effect of a relevant event.
About the authors
Mark Lloyd-Williams Partner
Ann Levin Partner
James Doe Partner
David Nitek Partner
Mark, Ann, James and David are partners at Herbert Smith Freehills. Each of them is highly experienced in alternative dispute resolution within the building and construction industries.
To learn more about the authors, visit the Herbert Smith Freehills website.