Alstom Signalling Limited (ta Alstom Transport Information Solutions) -v- Jarvis Facilities Limited (No. 1)
Case reference:
[2004] EWHC 1232 (TCC)
Tuesday, 11 May 2004
Key terms: Enforcement - Alliance Contract - pain/gain mechanism - formation of contract - incorporation of a pain/gain share term
The Claimant, Alstom, was acting as main contractor for the Sunderland Direct Project. Jarvis were engaged by Alstom to undertake some of the works.
A second notice of adjudication was issued on 31 October 2002. One of the issues that arose was whether a pain/gain mechanism had been incorporated within the Agreement. The Adjudicator came to the conclusion that the parties were still negotiating the precise terms of the pain/gain mechanism and that as it was a non-essential term. A contract had formed, but it did not include a pain/gain share provision.
Alstom sought a declaration that the Adjudicator was wrong and that the contract did indeed include a pain/gain mechanism.
Colin Reece QC sitting as Deputy Judge reviewed the factual sequence of events leading to the contract and the law relating to the formation of the contract and in particular, the distinction between essential and inessential terms. Whilst the parties agreed that a sub-contract had formed, the Judge held that a pain/gain sharing arrangement had not been reached and had not been incorporated within the contract.
A second notice of adjudication was issued on 31 October 2002. One of the issues that arose was whether a pain/gain mechanism had been incorporated within the Agreement. The Adjudicator came to the conclusion that the parties were still negotiating the precise terms of the pain/gain mechanism and that as it was a non-essential term. A contract had formed, but it did not include a pain/gain share provision.
Alstom sought a declaration that the Adjudicator was wrong and that the contract did indeed include a pain/gain mechanism.
Colin Reece QC sitting as Deputy Judge reviewed the factual sequence of events leading to the contract and the law relating to the formation of the contract and in particular, the distinction between essential and inessential terms. Whilst the parties agreed that a sub-contract had formed, the Judge held that a pain/gain sharing arrangement had not been reached and had not been incorporated within the contract.