In February 1994 ABB Power Plants Limited (鈥淎BB鈥�) had invited tenders for the design and construction of the onshore and offshore works for the cooling water system from a number of contractors, including Kier. Kier鈥檚 tender had been based on pre-tender discussions with Mouchel and upon tenders provided by Van Oord for the dredging and backfilling works and by Mouchel for certain design work. The tender provided by Van Oord included backfilling the trench with sand dredged from an area of the estuary known as 鈥淕rimsby Middle鈥� and which was referred to as Grimsby Middle Sand (鈥淕MS鈥�). It also included protecting the areas around the intake head and outfall with a layer of rock as scour protection.
There were discussions between Kier and ABB about the suitability of the GMS. Mouchel had assisted Kier in answering ABB鈥檚 questions about this. Kier鈥檚 tender of 拢30.4m was accepted by ABB on 26 September 1994. Under the contract, Kier was responsible for the design and construction of the offshore works. Kier entered into a subcontract with Mouchel for Mouchel to provide design services for the offshore works. Kier subcontracted with Van Oord for the offshore works, which included excavating the trench using a dredger and then backfilling of the trench and placing scour protection. Mouchel鈥檚 design included the design of the scour protection around the intake and outfall heads.
After the immersed tube units had been installed, Van Oord commenced backfilling the trench in October 1995. By December 1995 it had become apparent that scouring or erosion of the backfill had occurred and that there was scour around the intake heads. Remedial backfilling around the intakes and outfall was undertaken in January 1996 immediately before the rock scour protection was placed by Van Oord. On 15 January 1996 Van Oord wrote to Kier to say that they had completed the scour protection which had been approved. Subsequent surveys in 1996 showed that substantial amounts of fill were missing or were not of adequate depth. Kier undertook remedial works to the trench where the immersed tube units had been installed, which involved placing additional GMS and then installing a filter layer and a layer of rock armour.
In late April and early May 1996, a further survey was carried out which showed that the inlet heads were surrounded by rock to similar levels to the previous survey in February 1996 and that, except at one location, the bed was completely covered in rock around the towers. The exception was a scour hole on the upriver side of the inshore inlet head where the rock had been removed and sand was now filling the bottom of the hole. In June 1996 Kier decided that remedial work to the existing scour protection around the intake structures was required comprising the placing of a filter layer and rock adjacent to each intake head.
Kier commenced proceedings against Mouchel alleging negligence in the provision of its design services which had caused Kier to incur the costs of remedial works. Mouchel subsequently issued a Part 20 claim against Van Oord alleging that Van Oord were liable to Kier in relation to the supply of unsuitable backfill material and defective installation of scour protection. Kier and Mouchel settled the main action in 2009 following a mediation. Mouchel paid Kier 拢517,500 inclusive of interest and costs. Mouchel now sought a contribution from Van Oord based on that settlement.
During the tendering period, Van Oord had raised the question of where the backfill material should come. They had asked whether their tender should be based on re-use of the dumped in-situ material from the trench or whether they should base it on 鈥渁s dredged鈥� GMS for which they gave a description and enclosed a grading curve. The suggestion of GMS had evidently come from Van Oord. It was clear that after that the decision was made not to use the in-situ material and that, by default, GMS should be used, Kier had asked Van Oord to see what range of materials might be available for backfilling because Van Oord had some knowledge of the Humber. . The GMS had become the preferred choice but that was based on the fact that Van Oord was putting it forward as an alternative to the re-use of in-situ material.
The provisions of the subcontract upon which Mouchel relied on were effective to pass on the general construction obligations of the main contractor to the subcontractor. In relation to design Clause 2(1) of the Standard Form provided that Van Oord 鈥渟hall exercise all reasonable skill care and diligence in designing any part of the Subcontract Works for which design he is responsible鈥�. In this case, by an amendment to Clause 2(1) the scope of design was increased so that even if part of the Subcontract Works had been designed by ABB or Kier and included in the Contractors鈥� Requirements, Van Oord had to 鈥渃heck the design and accept responsibility, [therefor] first having obtained approval of the Contractor for any modifications thereto which the Subcontractor may consider necessary.鈥�
However, the subcontract had also included Document no. 16, Van Oord鈥檚 tender. By clause 4.1, this prevailed over the standard conditions and the conditions of the main contract. Document No 16 provided at Clause 4.25 in relation to design that Van Oord 鈥渨ill not be responsible for the design of any of the permanent and temporary works for the offshore and onshore works as defined in Section 1.3.1 of Volume 2 - Part (I), Section 鈥楢鈥� and Section 1.2 of Volume 2 - Part (II), Section 鈥楤鈥�.鈥� This provision was intended to and was effective to absolve Van Oord of any responsibility in respect of design for the offshore and onshore works, except for the one remaining area where Van Oord accepted 鈥渞esponsibility for the design of the trench slopes during the duration of our subcontract works鈥�.
The court held that Clause 4.25 was effective to remove the obligation of designing the backfill so as to provide protection from erosion and restore the sea bed to its original profile and condition from Van Oord. Van Oord could not have that design liability re-imposed as an obligation as to suitability by Clause 1.3.1 so as to require them to carry out that design. Where the parties have in their contract agreed that liability should be excluded then there is no possibility for that liability to be imposed by an implied term. Therefore, Van Oord had no obligation under the subcontract with Kier that the GMS should be suitable as backfill in terms of providing protection from erosion or restoring the sea bed to its original profile and condition.
In February 1994 ABB Power Plants Limited (鈥淎BB鈥�) had invited tenders for the design and construction of the onshore and offshore works for the cooling water system from a number of contractors, including Kier.聽
Mouchel Ltd. v Van Oord (UK)聽Ltd., [2011] EWHC聽72 (TCC)聽
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