Van Oord UK Ltd & Anor v Allseas UK Ltd

A contractor seeking additional payment for unforeseen ground conditions must satisfy every contractual condition, including timely notice, materially different conditions, objective unforeseeability and substantial modification of the scope or price. Pre-contract ground information is not a guarantee of conditions at every point. A contractor must exercise informed judgment as to likely variability. Contractual responsibility for permanent third-party permissions may differ from responsibility for optional temporary works. Delay claims must prove causation and allow for delay caused by the contractor’s own defaults. Contract rates stated to be all-inclusive ordinarily cover supervision and remain fixed unless the contract provides otherwise.

Van Oord UK Limited and Sicim Roadbridge Limited brought disruption, prolongation and additional-cost claims against Allseas UK Limited arising from onshore pipeline works in Shetland. The claims concerned alleged unforeseen peat conditions, the absence or delay of permissions for temporary and permanent pipeline crossings, and supervision costs connected with a beach-valve change order.

The claimants relied on contractual change-order provisions and alternatively alleged breach of implied duties of cooperation, non-hindrance and prevention. Allseas disputed liability, causation and quantum and counterclaimed repayment of interim sums.

1. Unforeseen ground conditions. The claim failed for want of timely contractual notice and, independently, on the merits. The conditions were not shown to differ from the Contract documents; an experienced contractor could reasonably have foreseen variable and deep peat; and the works and lump-sum price already contemplated an embankment method of the relevant width. The survey information was not a guarantee. The claim also failed on causation because substantial delay was attributable to the claimants’ own performance.
2. Temporary crossings. Article 23.4 required Allseas to seek permissions for proposed temporary crossings, but the obligation was qualified by the timing and adequacy of the claimants’ requests and supporting information. It did not guarantee that third parties would grant permission. No actionable liability or valid notice was established.
3. Permanent proximity agreements. Obtaining the agreements needed for the permanent trenchless crossings was Allseas’ responsibility. Their delay caused compensable delay and disruption in principle. The Court awarded £111,603 for reinstatement standing time and £221,623.52 for demobilisation.
4. Valuation and supervision. The contractual Limb 3 valuation required prior approval of the relevant expenses, rates and measurement sheets. The contractual rates were all-inclusive and covered supervision. No further beach-valve supervision sum was payable.
5. The claimants recovered £30,000 for an agreed stone-removal item. They were ordered to repay £1,895,349.89 in respect of Claims 1 and 3 and at least £588,882.98 in respect of Claim 2, subject to a remaining dispute concerning two change orders. Costs and interest were reserved.