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Wednesday, 31 August 2016

Saga Cruises BDF Ltd & Others v Fincantieri SPA

[2016] EWHC 1875 (Comm)

This was a shipping case, where the Owners (Saga) sought to levy liquidated damages. There were a number of delays to the scheduled completion date, some of which were the responsibility of the Yard (Fincantieri), and others of the Owners. These included delays to the creation of new cabins and a new decking system, which were the responsibility of the Yard, and delays caused by the Owner due to issues over the weight of the lifeboats and a request for additional insulation.

The Owner said that if completion of the works was already delayed by the issues for which the Yard was responsible, then delays to completion that were the responsibility of the Owners would not entitle the Yard to an extension of time.

The Yard said that where the completion was delayed by two events concurrently, one for which the Yard was responsible and one for which the Owners were responsible, no liability for liquidated damages arose. When there are two concurrent causes of delay, one of which would be a relevant event and the other would not, the contractor is entitled to an extension of time for the period of delay caused by the relevant event, notwithstanding the concurrent effect of the other event.

Having considered the authorities and textbooks, Judge Cockerill QC concluded that unless there is a concurrency actually affecting the completion date as then scheduled the contractor cannot claim the benefit of it. Care must be taken to avoid adopting an over-broad approach. Causation in fact must be proved based on the situation at the time as regards delay. When the Owners’ delays occurred, there were already outstanding issues which were the responsibility of the Yard. The point here is that the Yard was not able to demonstrate true concurrency. Unless there is a concurrency actually affecting the completion date as then scheduled a contractor cannot claim the benefit of it. The works had already been delayed by the Yard-risk events to the extent that the Owner delay had no impact on the completion date.  In other words, you must always first consider the issue of causation as there may be situations where concurrent delay will not automatically entitle the contractor to an extension of time.

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