LEGAL EAGLES
TO FORESEE OR NOT TO FORESEE
EXPLORING THE COMPLEXITY OF DELAYS IN THE OFFSHORE ENVIRONMENT
This article touches on the various challenges encountered in the analysis of a contractor’s contractual entitlement to extensions of time and additional costs incurred during the offshore installation of monopile foundations to an offshore wind farm.
obligations, then the contractor was entitled to give notice and apply for an extension of time to any key date and/or of the time for completion and also payment of additional costs, subject to other criteria on timing of submissions and form being met.
This is mirrored under the extension of time clause which provides that the contractor may claim for an extension of time if the works are or will be delayed by a breach or default by the employer in providing the installation vessels. There’s nothing unusual in any of that you may say.
RESPONSIBILTY
Moreover, the contract also requires that the employer shall be responsible for ensuring that the employer’s personnel and the employer’s other contractors on the site cooperate with the contractor’s efforts.
LIABILITY
More importantly, this article highlights issues concerning where liability lies in relation to delay events and additional costs, and may provide some food for thought when drawing up conditions of contract for future installation works. Despite numerous pages of conditions, lengthy schedules and extensive employer’s requirements incorporating innumerable appendices, annexes, technical requirements, and responsibility matrixes the answers to certain practical issues may not always be immediately apparent.
AN EXAMPLE
Consider a contract where the employer provides and makes available installation vessels free of charge in accordance with the scope of supply and as defined in the employer’s requirements, to enable the contractor to execute the works.
In the event that the vessels are not in sound operational condition, safe and fit for use as set down in the contract or the employer was otherwise in breach of its
A further contractual provision obliges the contractor to afford appropriate opportunities to the employer’s personnel, other contractors employed by the employer, and the personnel of any legally constituted public authority to carry out work. However, it also provides that any such opportunity shall constitute a variation if and to the extent that it, or the cost incurred by it, were ‘unforeseeable’.
The contractor argued that it was not foreseeable that it would be delayed as a result of various matters notified to the employer; and if the employer did not accept that there had been a variation then any changes to the employer’s requirements or the works (scope and/ or method of working) would amount to a breach of the contract or default thereunder by the employer and/or delay, impediment or prevention caused by or attributable to the employer, the employer’s personnel, or the employer’s other contractors on the site.
RECOGNITION OF ‘UNFORESEEABLE’ Whilst recognising that responsibility for adverse weather and all mechanical breakdowns to the installation vessels including amongst others, hydraulic leaks, crane breakdowns, and leg jacking problems and the demonstrated critical
delay to the schedule of installation rests with the employer, the liability for other claimed delays was not so clear cut and more precisely, could not be readily considered as ‘unforeseeable’.
The term ‘unforeseeable’ was simply defined as meaning not reasonably foreseeable by an experienced contractor by the base date. Clearly this is not particularly helpful.
NOW CONSIDER THE FOLLOWING DELAYING EVENTS… • Compliance with the directions of such personnel as the marine warranty surveyor
• The vessel master and the lifting supervisor on the employer’s vessels or the harbour authorities
ALSO CONSIDER… • Crew changes by the vessel operator • Jacking down for bunkering of fuel or water
• Rest periods by the vessel engineer • Loading of stores and spare parts in port
• Waiting on ferry traffic or the harbour pilot
• Or even waiting for the arrival of the marine mammal observer to board the installation vessel
All of the foregoing matters could be considered as ordinary everyday activities associated with the running of a vessel on a 24/7 basis. Arguably, waiting on port traffic in a working port environment is a stoppage which is neither unexpected nor ‘unforeseeable’.
OTHER CONSIDERATIONS? Should such activities be viewed as examples of delay, impediment or prevention attributable to the employer, the employer’s personnel, or the employer’s other contractors on the site and should such operations be considered as a variation or as giving rise to an extension of time and additional costs?
CLARITY
As in all such matters the answers should lie in the express contract wording. Clarity in the drafting of the conditions of contract should prevail to ensure all parties recognise where the liability for delaying events and the financial consequences fall.
Michael Turgoose Driver Trett UK
www.drivertrett.com
www.windenergynetwork.co.uk
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