Claim No: CFI 002/2013
THE DUBAI INTERNATIONAL FINANCIAL CENTRE
COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum,
Ruler
of Dubai
IN THE
COURT
OF FIRST INSTANCE
BEFORE JUSTICE SIR DAVID STEEL
BETWEEN
SPX MIDDLE EAST FZE
(FORMERLY INVENSYS MIDDLE EAST FZE (APV DIVISION)
Claimant
and
JUDI FOR FOOD INDUSTRIES
Defendant
Hearing: 18 February 2014-20 February 2014
Counsel: Hamish Lal (Jones Day) for the Claimant
Dr Mohammad Karbal (Karbal & Co Legal Consultants) for the Defendant
Judgment: 25 March 2014
JUDGMENT OF JUSTICE SIR DAVID STEEL
Summary of Judgment
| The Claimant sought to recover two unpaid instalments of the contract price for a milk and fruit juice processing plant installed by them at the Defendant's premises in Libya in 2010. The sums said to have been outstanding since January 2011 totaled €540,000. The Defendant asserted that the work on the plant was never completed by the Claimant and made a counterclaim for the cost of engaging a third party to finish the work. The Defendant also pleaded a substantial loss of profit claim. The counterclaim for loss of profit was dismissed as unsupported by any evidence. However it was concluded that commercial production and commissioning of the plant was not achieved until further work had been undertaken. In the result the
Court
gave judgment for the outstanding instalments but only as from December 2012, and also gave judgment on the counterclaim for work carried out for the Defendant in the sum of €43,000. |
This summary is not part of the Judgment and should not be cited as such
JUDGMENT
Jurisdiction
1. The Claimant ("
SPX"), formerly called Invensys Middle East FZE, is an enterprise within the Jebel Ali Free Zone incorporated under the laws of the
UAE
. The Defendant ("
Judi") is a company organised under the laws of Libya and is registered in Tripoli.
2. These proceedings arise out of a written contract between SPX and Judi dated on or about 26 April 2007. The provision relating to jurisdiction set out in the contract reads as follows:
"24. Jurisdiction.The parties agree that the courts of the country of [SPX] shall have exclusive jurisdiction in respect of any disputes arising under or in connection with the Contract, unless the parties agree in writing to some other form of dispute resolution (including mediation or arbitration) at the time the dispute arises."
3. In fact, by an agreement dated 6 October 2013, the parties agreed to confer jurisdiction to hear the present dispute on this court. This was pursuant to Article 5(2) of Law No. 16 of 2011 which supplemented Law No. 12 as from October 2011 as follows:
"The Court of First Instance may consider and rule in civil and commercial cases and claims within its jurisdiction if submitted thereto by the agreement of the parties in writing whether before or after the dispute provided that this agreement must be according to a clear and explicit special provision."
4. These proceedings accordingly represent one of the first examples of the engagement by parties to a contract to the "opt-in" jurisdiction of this court. It is legitimate to hope that this example is the first of many where parties take advantage of the extended jurisdiction of the Court introduced by the provision in Law No. 16.
Contractual background
5. SPX specialises in the supply and installation of flow technology. Judi is in the business of milk and juice production. By the agreement dated 26 April 2007, SPX agreed to supply and install in Judi's premises in Libya a new UHT Processing Line for milk and juices.
6. The contract price was €3,600,000 payable in 6 instalments. Judi duly paid the first four instalments but nos. 5 and 6, in the amount of €180,000 and €360,000 respectively, remain outstanding.
7. The payment terms in respect of these last two instalments were the focus of the debate before me. They are by no means straightforward:
"5% of the contract value shall be paid at sight at start of commercial production against simple invoice accompanied by Taking Over Certificate (TOC) or 270 days from the Bill of Lading date or Air Way Bill, whichever is earlier, if [sic] any delay is caused by Judi10% of the contract value shall be paid upon completion of commissioning and starting of commercial production at sight and against 10% Bank Guarantee valid for Warrantee [sic] period of 12 months starting from TOC date."
8. Leaving aside various issues of construction that were raised, the position was further complicated by the fact that Judi never tendered a TOC and by the same token SPX never tendered a bank guarantee. But before getting further into the factual background, it is desirable to identify other parts of the contractual documentation which are relevant.
9. The contract in regard to payment was supplemented by (a) a quotation (b) a revision to the quotation and (c) SPX's standard conditions of sale.
10. The quotation included the following provisions:
(a) The capacity of the pasteuriser to be 25,000 L/h (save in the case of Mango and Guava to remain 20,000 L/h).
(b) Judi to open a letter of credit in favour of SPX, its validity to be extended at SPX's request.
(c) The schedule to be 48 weeks with commissioning in weeks 42 to 47 and taking over/commercial production in week 48.
(d) Draft TOC form was attached. This read as follows:
"The Warranty period is 12 months. The Warranty period commences on the day the plant is taken over or 160 days from the date of the Bill of Lading whichever is the earlier.
…
The Purchaser hereby declares the delivery, installation, function and capacity of the plant is accepted and approved except for the items mentioned in the below snags list.
Snags if any will be corrected to the Purchaser's acceptance as soon as the required materials / components are available."
11. The agreed revision to the quotation contained the following terms:
"11) Sterile test for UHT will be for both juice and all milk products according to agreed procedure.
12) Juice filling will be directly from pasteuriser to the filler or through the sterile tank to the filler according to PID1approved by Judi.
. . .
14) A septic tank will be tested for sterility at least for 60 hours."
12. The conditions for sale (from which the jurisdiction clause has already been quoted) also provided:-
"6. Terms of Payment
…where the contract provides for the Plant or the Works to be paid for by instalments, payment of any instalment on the due date is a condition precedent to further performance of the Contract by the Company. If any monies are in arrears from the dates on which they are due, then such monies will bear interest on a day to day basis from the original due dates at the rate of 4% per annum above the prevailing EURIBOR…
. . .
16. EXTENT OF WARRANTY
(i) Subject to the terms of this clause the Company will replace, or at its option, repair free of charge any part of the Plant manufactured by the Company and rectify any part of the Works executed by the Company which may prove defective through faulty design, materials or workmanship, fair wear and tear excluded, upon the Purchaser giving the Company written notice of such faulty design, materials or workmanship.
(ii) The above warranty shall only apply in respect of matters whereof the Purchaser gives written notice within twelve calendar months of taking over or of when the plant is first put into commercial production, whichever is the earlier.
(iii) The above warranty contained in sub-clause (i) hereof shall only apply provided that:
(a) Defective parts are returned to the Company's works or, if that is not feasible, the Company is given all reasonable facilities for repair, inspection and testing;
(b) The Purchaser have complied with the Terms of payment and all other conditions of the Contract and the Plant shall have been operated and maintained in accordance with the instructions provided by the Company;
(c) No replacement, repair or rectification is made or attempted without the Company's prior written approval.
17. FORCE MAJEURE
If the Company is prevented or delayed from or in performing any of its obligations under the Contract by force majeure, which shall include but not be limited to strikes, lockouts or other industrial action whether or not by involving employees of the Company, then the Company may give notice in writing to the Purchaser of the circumstances constituting force majeure and of the obligation, performance of which is thereby delayed or prevented and shall thereupon be excused from compliance with such obligation for as long as the effect of such circumstances may continue…
. . .
21. LIMITATION OF LIABILITY
Subject to the provisions of this Clause 21, the Company shall not be liable in any circumstances whatsoever to the Purchaser whether by way of indemnity or by reason of any breach of contract or of statutory duty or by reason of tort (including but not limited to negligence) for any loss of profit, loss of use, loss of production, loss of contracts, facility downtime, increased plant operating costs, Purchaser's labour costs, or for any special or incidental costs or for any financial or economic loss or for any indirect or consequential damages or losses whatsoever that may be suffered by the Purchaser or claimed against it. The Company's total liability under the Contract shall not exceed the Contract value."
Proceedings
13. Preparations for the trial have been unsatisfactory in a number of respects, many of which must be laid at the door of Judi and its legal team. Even allowing for the continuing difficulties in conducting affairs in Libya since the outbreak of the civil war in February 2011, the fact remains that Judi has failed to comply with a number of orders of the court. I will identify only a few.
14. The Case Management Order of H.E Justice Omar Al Muhairi was dated 7 October 2013. It made provision for requests to produce documents and objections thereto and for the filing of expert reports. Of particular significance in this regard was documentary and accountancy material touching on the counterclaim advanced by Judi.
15. The counterclaim was very large and dwarfed the claim by SPX for the two remaining instalments. The major item was a claim for loss of profit in the sum of nearly €2 million. It was Judi's case that the express terms of the contract relieving SPX from liability for loss of profit were not enforceable. However, apart from some invoices which were said to reflect the cost of remedying various snags, Judi produced no documentary support for the counterclaim. In tune with this, Judi simply failed to make any entries by way of objection on the Redfern Schedule produced by SPX which sought the relevant documents. Nor indeed was there any factual witness evidence which even touched on the topic.
16. It appeared from the correspondence that Judi was proposing to rely on a report from a Mr Abdulfatah Ali by way of "audit" of the claimed losses. Whilst initially put forward as expert evidence, it was contended in due course that it was not. Leaving aside the obvious fact that it constituted expert evidence but was not compliant with the rules, its content fell lamentably short of providing any support for the counterclaim. It appeared to be simply a repetition of a short anonymous "Loss Calculation Report" produced by Judi for the purposes of the proceedings.
17. Almost inevitably the
Registrar
ordered that the Case Management Conference be restored to deal with these matters. This led to the exchange of lengthy written submissions. The restored hearing came before me on 29 January 2014. My order called for elaboration as to what witnesses Judi proposed to call and in what manner, an explanation as to the mode in which disclosure was accomplished and the provision of an appropriate expert's report if Mr Ali was to be called.
18. In the event, no further documents were forthcoming although some detail as to the process followed in effecting disclosure was provided. No substantive additional report from Mr Ali was served, yet it was suggested by Judi that he should nevertheless give evidence by video link as he was unable to get a visa. I am extremely doubtful whether I would have granted permission but in any event no facilities were available in Libya.
19. In the result, given the absence of proper disclosure and any supporting factual or expert evidence, the loss of profit claim (together with the claim for alleged enhanced costs) was bound to fail. Indeed I did not detect any enthusiasm for that part of the claim during the hearing within the helpful and realistic submissions of Dr Karbal.
Witnesses
20. Each side called one factual witness. SPX called Mr Marcel Gesterkamp who had become Project Manager for Judi Installations in February 2012. Prior to that the Project Manager had been Mr Tamer Fattah who had reported to him as Project Director (a position held since October 2009). I should note that his statement (and thus the
evidence in chief
) was in somewhat argumentative rather than narrative inform.
21. Judi called Mr Azam Malik, Production and Project Manager who had been involved with the present project since 2007.
22. Both witnesses gave the impression of seeking to help the Court though they were of course speaking of events of some 4 years ago. In any event, impressions can be misleading. This makes it a paradigm case for applying the dictum of Lord Goff inGrace Shipping v. Sharp & Co[1987] 1 Lloyds Rep 207 at 215:
"And it is not to be forgotten that, in the present case, the
Judge
was faced with the task of assessing the evidence of witnesses about telephone conversations which had taken place over five years before. In such a case, memories may very well be unreliable; and it is of crucial importance for the Judge to have regard to the contemporary documents and to the overall probabilities. In this connection, their Lordships wish to endorse a passage from a judgment of one of their number in Armagas Ltd v. Mundogas S.A. (The Ocean Frost), [1985] 1 Lloyd's Rep. 1, when he said at p.57:-
"Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth."
That observation is, in their Lordship's opinion, equally apposite in a case where the evidence of the witnesses is likely to be unreliable; and it is to be remembered that in commercial cases, such as the present, there is usually a substantial body of contemporary documentary evidence."
Documentary story
23. Work on the project was due to start on site in 2007. However, due to construction difficulties unrelated to SPX's role, the project was put on hold by Judi until 2009. The last Bill of Lading in relation to the shipment of goods for installation in the project was issued on 30 October 2009.
24. Work was approaching completion by December 2010. Indeed by 13 December 2010 it is SPX's case that "commercial production" within the meaning of the contract commenced. To a limited extent this was common ground. The Particulars of Claim asserted as much in paragraphs 24 and 33. This was admitted in paragraph 18 of the Defence and
Counterclaim
with, however, a significant reservation:
"As stated in Paragraph 3 of the Defence, as soon as commercial production began on 13 December there were production issues, chiefly that the entire production for the month of December 2010 was unsterile and could not be used…"
25. In the Reply and Defence to Counterclaim SPX put Judi to proof of this allegation. In this regard (and others) SPX makes the complaint that disclosure of documents by Judi was inadequate to make good its case.
26. I should add that SPX contended that "completion of commissioning" was achieved on 20 December 2010. Once again this was in part common ground on the pleadings but subject to the same reservation on Judi's part.
27. The Reply to the Defence to the Counterclaim served by Judi also merits quoting in the context of commercial production and commissioning:
"3. Further, the Defendant admits that
the process to testthe commercial production commenced on the 13th of December 2010/However, during
the trial runperiod the products were contaminated and represented health risk to the consumer. This was admitted by the Claimant when the Claimant signed the Snag List (Exhibit 2)
2stating, in points 6, 10, 11, 16 and 19 of the Snag List (Exhibit 2) was not sterile. Therefore the Defendant rejects the Claimant's argument that commercial production was completed with end results that the products will be saleable. An expert report to this regard will be submitted as per the dates stated in the CMC Order issued by the
DIFC Courts
.
3. . .
17. As to paragraph 18, the Claimant has to explain how a "successful" commercial production commenced on 13 December when the commissioning, as claimed by the Claimant was completed on or around 20 December 2010. Usually commissioning takes place before commercial production. There are ten points in the Snag List (Exhibit 2) referring to commissioning. By signing the Snag List (Exhibit 2) on the 23 February 2012 the Claimant admits its failure to complete the Works in 2010. Therefore, the commencement of commercial production is irrelevant because (i) the Claimant failed to complete its obligations, including commissioning, and (ii) commercial production was unsuccessful."
28. Turning to the documentation, the starting point is a report of an automation engineer (Chinh Bui) of Dairy Soft Ltd. (a subcontractor of SPX) dated 10 December 2013. This commented on both the hardware and software for automation of the project. Problems had emerged during his time on site from 17 October 2010. The hardware needed to be modified "in order to cope" with the juice part of the system. As regards the software, unapproved modifications had been made to the extent that "the juice commissioning haven't (sic) started yet."
29. As regards the product in the period around the dates put forward for "commercial production" and "commissioning", a report prepared by Combibloc for Judi dated 18 January 2011 is instructive. Combibloc had been brought in to investigate "un-sterilities reported on production dates 15, 16, 18, 19, 20, 21 and 22 December."
30. While Judi appears to have achieved sterile runs on 31 December and 1 and 2 January 2011, further runs were conducted in association with Combibloc on 11 and 12 January some of which again proved to be unsterile. Combibloc recommended a change in diameter for some of the steam pipes with no further runs until that modification was affected. Combibloc also called for work to be undertaken to eliminate leakages of milk into the steam lines.
31. Shift reports produced by Judi confirmed the difficulties with sterility in this period. By now however the parties were in discussion about the contents of a snag list. SPX put forward a list on 13 January 2011, later revised on 9 February and 27 February. This was put forward against the background of a contention by SPX that Judi had taken over the project on 12 January or alternatively 16 January and that accordingly a Take-Over Certificate (TOC) should be deemed to have been issued that day.
32. It was Judi's case that there was no obligation on their part to issue or sign a TOC as the work remained incomplete. Indeed intermittent shift reports from 19 January to 20 February revealed further production difficulties. A striking example took place on 8 February at a time when SPX were contemplating withdrawing their staff given the worsening political situation in Libya.
33. Mr Malik e-mailed Mr Tamer as follows:
"I am writing you this email to inform you that the system is still not ready for hand over. We are facing problems relating to commissioning and program. Today we got three line unsterile and wasting product and time. We got line 3 & 5 unsterile when aseptic tank was full and program did not work properly. Some time later line 4 goes unsterile due to problem in valves in storage tank area.Your engineer are on site and facing daily new problem. This situation is not acceptable and we do not know how Judi will run this plant.
Furthermore 2nd Aseptic tank need to be fixed urgently as now almost two month passed and no progress to solve this issue. This problem is not allowing us to run flavour milk on small line which was one of the main reasons to have two aseptic tanks.
Furthermore Judi will not accept to run CIP plant at 60C as Combibloc need min 70C and as per our contract APV will supply all utilities as per Combibloc requirement.
Your engineers are planning to leave the site even, we are facing many problems. Please take needful actions to have smooth production for at least a week time."
34. The response from Mr Tamer raised a number of issues:
(a) that the aseptic tank was out of warranty
(b) that lack of sterility was attributable to program and valve errors
(c) that it was not possible to replan departure of SPX staff
35. On 19 February 2011 Mr Malik wrote again to say that problems had been encountered during a banana juice run. The internal reaction of SPX on 20 February 2011 was that the plant had not been commissioned for any kind of juice but milk only. In any event, the situation in Libya had deteriorated as a result of the impending civil war and SPX personnel left Libya on 21 February 2011.
36. A Force Majeure situation had now arisen in regard to any further activity on SPX's part in completing work on the plant and/or resolving any snags. The plant was operated intermittently throughout 2011 with SPX pressing for execution of the TOC. Absent any response, SPX proposed by letter dated 22 November 2011 that a TOC be signed, but instalments 5 and 6 be paid less a sum of €40,000 payable upon completion of snag items.
37. SPX dealt at some length with its own case and with Judi's complaints in a letter dated 29 January 2012, adopting the position that their resolution could only be accomplished once the outstanding instalments were paid and the Force Majeure situation resolved.4
38. In the result, a meeting took place in Dubai in February 2012 to seek to resolve the dispute (and other matters of contention between the parties relating to a second plant). One outcome was a snag list running to 21 items variously categorised as "commissioning", "mechanical" or "software". This list was signed and dated by both parties. However it was SPX's position that the meeting had been without prejudice and that consequently it was not open to Judi to put the list in evidence let alone rely on it.
39. In due course, Mr Gesterkamp proposed a time line for execution of the work following payment of the outstanding instalments so as to permit SPX staff (assuming visas were available) to verify and fix snags over a period of some 6 to 10 weeks. This in turn led to a requirement by SPX for acceptance by Judi of an additional cost variation of €30,000 to employ contractors to complete the work.
40. Further correspondence ensued including an e-mail from SPX to Judi dated 14 June 2012 proposing terms for resolving the issues between the parties, including a proposed side letter agreeing that the February snag list was a "true, complete and definitive list of snags outstanding on the project." I discuss hereafter the precise status of the snag list and its admissibility. Suffice it to note for the moment that the list included the following items:
"6. The working temperature of steam barrier in valve matrix for line 3 and 4 not stable and it leads to unsterility of the matrix.
. . .
10. Pasteuriser should run 20,000 L/h capacity for mango juice but practically we get unsterile on this speed because pasteurisation temperature drops below this set point. We can run 15,000 L/h.
11. UHT should run 15,000 L/h for mango juice but practically we get unsterile on this capacity because of pasteurisation temperature drops below set point.
. . .
16. Level control in balance tank of UHT is not stable, which is causing unsterility.
. . .
19. PT 300 (501-178) temperature drops below set point but Aseptic tank not become sterile."
41. These complaints have to be viewed against the background of the admitted scope of work having included:
(a) Installation of sterilisation or aseptic tanks
(b) Valve and gasket design and installation
(c) Installation of a connection between the new installed system and the old pasteurising station
(d) Installation of six options for transporting product
42. Leaving aside the claim for loss of profit, Judi's case is that it engaged a sub-contractor (AU2Mate) to deal with the snag list. The work was performed in June and December 2012 and was invoiced in the total sum of €42,927.29. It is accepted by Judi that once the work was accomplished, the project was fully commissioned and full commercial production was possible.
Analysis
43. The claim is directed to two instalments which are triggered by different criteria. Instalment No. 5 was payable either (a) on start of commercial production against an invoice accompanied by a TOC or (b) 270 days from the Bill of Lading date, whichever is earlier. It is common ground that the 270 day period expired on 27 July 2010 which on any view was earlier than the start of commercial production even on SPX's case.
44. How does the proviso "if any delay is caused by Judi" work? It was common ground that the commencement of installation was delayed by Judi by over a year. It was submitted by SPX that this delay activated the alternative payment date. I cannot accept that. On any business-like construction of the clause, the delay must impact on progress towards the start of commercial production from the commencement of work for which the shipment was intended. It was not submitted by SPX that Judi was responsible for any delay in that respect.
45. It follows that it is necessary to identify the date of the commencement of commercial production. Before embarking on that task however I must deal with the requirement that any payment was to be on sight of (a) an invoice and (b) a TOC. Following the hearing, the relevant invoice was disclosed by SPX although notably it was dated and signed on 26 January 2012 and sent out with SPX's letter of 29 January 2012 setting out its case as referred to earlier.
46. As regards a TOC, no such document was executed by Judi. SPX had apparently prepared a TOC on 12 January 2011 (a copy of which was forwarded under cover of the letter of 29 January 2012) which contained the following declaration:
"We declare that the installation and commissioning of the [new UHT Processing Plant] has been successfully completed."
This appears to elide commercial production with commissioning. In any event this was not in the form prescribed by the contract which was directed at take-over. Furthermore there was no reference to the warranty or to the snag list.
47. Leaving aside these considerations, there was some debate before me about the position if, despite commercial production having commenced, Judi failed or refused to complete a TOC. As indicated above it was SPX's case that in that situation a TOC was "deemed" to be issued. I was not persuaded that such was consistent with the authorities. I helpfully received some extracts from Hudson's Building and Engineering Contracts 12 Ed which is authority for the proposition that where a party refuses to furnish a certificate, it is not deemed to be issued but to the contrary the requirement can be disregarded as reflecting an example of a person seeking to take advantage of a condition the performance of which they have hindered. It is unnecessary to embark on an analysis as to whether this reflects the impact of an implied term or a form of waiver or estoppel.
48. That all said, the principle issue of fact is whether commercial production began on 13 December 2011 or whether as alleged by Judi there were attempts to commence production which were wholly or largely unsuccessful as a result of software, mechanical, construction, electrical or other defects.
49. Nonetheless this topic cannot be considered in isolation from the terms for payment of the 6th instalment. There were three requirements:
(a) completion of commissioning;
(b) start of commercial production;
(c) provision of 10% guarantee valid for 12 months from TOC date.
50. I start with discussing the guarantee. Given the absence of a TOC it is perhaps not surprising that no guarantee was tendered. In any event Judi raised no complaint either contemporaneously or in the pleadings in regard to the absence of any guarantee. It follows this precondition can be disregarded.
51. I turn to the other two preconditions. That relating to commencement of commercial production is on the facts not material. It would only arise if the fifth instalment had been payable before commencement of commercial production by reference to the Bill of Lading date, but in the present case by definition the earlier instalment will not have been paid if commercial production was not accomplished.
52. That leaves completion of commissioning. One difficulty is identifying what is involved in commissioning if a TOC has already been executed in the form annexed to the quotation. Indeed as Dr Karbal submitted, there is an impression that matters are not identified in the correct or at least logical order. It might be thought that commissioning should be followed by commercial production and take-over. Indeed that is precisely what is provided for in the Time Schedule in the quotation.
53. It is not necessary to embark on a discussion of this issue since the battle lines are clear. Either the instalments came due in or around mid- January 2011 as SPX contends or in mid- December 2012 as Judi now contend. The significance of this dispute has narrowed down to two points:
(a) the period over which contractual interest is payable;
(b) the entitlement of Judi to recover any cost of remedial work.
54. There is no question that the documentary and witness evidence relating to the condition of the project in the run up to the revolution is somewhat sparse. The contemporary material strongly supports Judi's case, however, that there were major sterility problems together with a substantial shortfall on production rates and a general lack of ability to use the plant for juices. In this regard, SPX, having put Judi to proof of the defects and of the responsibility of SPX for them, places considerable reliance on both the existence and brevity of the snag list on SPX paper variously dated 13 January, 9 February and 27 February 2011. This was put together by Jaafar Hajjoubi, SPX Commissioning Engineer. I am not persuaded that this is jointly agreed let alone a complete snag list.
55. This leads to consideration of the status and admissibility of the signed snag list dated 23 February 2012 which emerged from the meeting in Dubai. Even assuming that the discussions were designed to achieve an overall settlement and thus prima facie without prejudice (although no documentation was produced despite references to an agenda said to be annotated to that effect), it is manifest in my judgment that it was indeed an agreed snag list (subject to review on site when conditions allowed). The list was then the basis for the timetable for remedial work dated 24 April 2012. This in turn followed upon a request dated 12 April from SPX for a response to the "official letter" (presumably dated 29 January 2012) seeking confirmation of "the definitive snag list." The list in due course was to form the basis of a side letter to the contract as being "true, complete and definitive." These exchanges in my judgment waived any privilege that could otherwise be claimed for the list.
56. In the result, the parties treated the snag list not as a post-commissioning list of outstanding items, but as a precondition to the delivery of a TOC (implying joint recognition of commercial production and commissioning) once the snags were rectified.
57. Thus instalments 5 and 6 have been due since 6 December 2012 when AU2Mate completed their work on the installation. Further, I conclude that these two debts attracted interest at the contractual rate of 4% above EURIBOR from 20 December 2012 until the date of this judgment.
58. What, if anything, is recoverable on the counterclaim by Judi? I hope that I have made it plain that the claim for loss of profits and expenses must fail. It is wholly unsupported by any evidence and in any event is precluded by the express terms of the contract. I do however accept that Judi is entitled to claim the reasonable cost of remedying defects in the snag list. The claim is put forward in the sum of €43,000. Again the supporting material is thin. However I have concluded that Judi has just surmounted the burden of proof on the topic and I give judgment on that part of the counterclaim plus interest at 2% above EURIBOR from 20 December 2012 until the date of this judgment.
Costs
59. This leaves the issue of costs. My provisional view is that there should be no order as to costs but this is without the benefit of any argument. If the parties are unable to agree on the costs issue, I would invite each side to furnish details of their costs together with short written submissions within 21 days of the date of this Judgment.
Issued by:
Mark Beer
Registrar
Date of Issue: 25 March 2014
At: 10am
