Monthly Archives: February 2021

REUTERS | Vijay Mathur
February 23, 2021

Contract interpretation – who has commercial common sense?

The dust is slowly settling over the arguments about how contracts should be interpreted. We know that “this is not a literalist exercise focused solely on a parsing of the wording of the particular clause” and that “[t]extualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation” (as stated by Lord Hodge in Wood v Capita Insurance Services Ltd). That means the factual background (matrix of fact) and commercial common sense still have a role to play where the plain meaning of the words is not clear (which is usually the reason why there is a dispute in the first place).

Identifying the relevant factual background presents its own challenges, but I am interested in how you identify what makes commercial sense. We are familiar with the reasonable man on the Clapham omnibus, do we now need to look for his sister, the commercially reasonable business woman on the Waterloo & City line (when not working from home)? Continue reading →

REUTERS | Shamil Zhumatov
February 16, 2021

Parties beware: ensure your jurisdictional challenge is clear and appropriate to avoid waiver

Earlier this month, Scotland beat England in the Six Nations at Twickenham for the first time in 38 years. When it last happened (in 1983), Michael Jackson’s Billie Jean was number one and Octopussy was the latest James Bond movie (which we all know is not in my top five movies of the 1980’s).

I mention this only because Scotland’s courts are also currently ahead of the English courts in terms of published adjudication enforcement judgments in 2021. For that reason, this week I’m looking at two of them: Hochtief Solutions AG and others v Maspero Elevatori S.p.A and Barhale Ltd v SP Transmission plc (I realise Hochtief is from late December, but we shouldn’t let that fact get in the way of an amusing intro!).

Both cases concerned jurisdictional issues but with very different outcomes. Continue reading →

REUTERS | Regis Duvignau
February 10, 2021

The VAT reverse charge is coming soon. So what else is new?

If the Brexit deal, ongoing Covid-19 developments and updates on the Building Safety Bill and the Corporate Insolvency and Governance Act isn’t enough to keep those in the construction industry on their toes, the latest guidance from HMRC is that the VAT reverse charge on construction services will commence from 1 March 2021.

In our previous blog on the VAT reverse charge in September 2019, we discussed what the VAT reverse charge is, why it is being introduced and the major effects it will have on how VAT is handled in the construction industry. The key message is that the reverse charge will require a recipient (the employer), rather than the supplier, of specified building and construction services to account for VAT. The new rule will apply unless the recipient is an “end user” or an “intermediary supplier” or is not required to report payment under the Construction Industry Scheme, in which case the normal VAT rules apply. Continue reading →

REUTERS | Kham
February 9, 2021

Disputes across the horizon: arbitration in Qatar

This post is the second part of a series covering issues that frequently arise in international arbitration, each with a specific regional focus. This article examine two categories of issues that frequently arise in construction arbitrations related to Qatar:

  • The enforcement of arbitral awards.
  • The potential liability of arbitrators and experts practising in the region. Continue reading →
REUTERS | Mike Hutchings
February 3, 2021

You must adjudicate before you can arbitrate

I often wonder how much time parties spend on looking at the dispute resolution clauses in their contracts.  Before work starts they might ponder whether they want to arbitrate or litigate at the end of the day (and draft the contract accordingly), but do they really pay attention and debate the benefits of a tiered dispute resolution clause? You know the sort of thing I mean, where the parties agree to having senior individuals meeting, or mediating (or both), before they refer a dispute to adjudication or get embroiled in court/arbitration proceedings.

I realise that tiered dispute resolution clauses might not work so well if the parties are parties to a construction contract, since they have a right to refer a dispute to adjudication “at any time” but, just having the right to do so, shouldn’t stop parties trying to agree to resolve their differences before any notice is served.

However, regardless of whether the parties are parties to a construction contract, if they have a tiered dispute resolution clause in their contract, one thing they shouldn’t do is jump in at the deep end, missing out a step or two on the way. We know the judges don’t like this and Lady Wolffe (in The Fraserburgh Harbour Commission v McLaughlin & Harvey) is the latest to pass judgment on this type of behaviour. Continue reading →

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