Vinci Construction UK Ltd v Beumer Group UK Ltd

A contractual provision is void for uncertainty only where the court cannot identify the parties’ objective agreement or cannot safely prefer one equally possible meaning over another. Courts should strive to give contractual provisions sensible effect, particularly where the contract has been performed. A distinction must be drawn between conceptual uncertainty, which may invalidate a provision, and evidential uncertainty, which concerns proof of whether identified facts fall within it. Contractual terms must be construed in the context of the agreement as a whole, its commercial purpose and the relevant factual background. Where the contractual documents objectively identified the work allocated to separate sections, provisions for sectional completion and delay damages were sufficiently certain and enforceable.

Vinci engaged Beumer under an NEC Engineering and Construction Subcontract to design and install a baggage handling system at Gatwick Airport. The subcontract divided the works into sections and provided for delay damages if sectional completion dates were missed. Following delays, the parties entered into a Settlement Agreement revising access dates, completion dates and key dates.

An adjudicator concluded that the sectional delay-damages provisions were uncertain, inoperable and unenforceable. Vinci sought declarations as to the proper construction of the subcontract as amended. The central issue was whether the works comprising the baggage and remaining-works sections were sufficiently identifiable and certain for the sectional completion and delay-damages provisions to operate.

1. Claim succeeded. The provisions for sectional completion and delay damages were sufficiently identifiable, certain, operable and enforceable.
2. The subcontract was to be construed objectively, having regard to the natural and ordinary meaning of the words, the other contractual provisions, the overall purpose of the contract, the factual and commercial background known to the parties, and commercial common sense, while disregarding subjective intentions. The approach in Arnold v Britton [2015] UKSC 36 and Wood v Capita Insurance Services Ltd [2017] UKSC 24 was applied.
3. The contract had to be read as a whole, with the wording of each clause interpreted so far as possible in harmony with the others. The court was reluctant to find contractual uncertainty. The distinction was between conceptual uncertainty, which could invalidate a provision, and evidential uncertainty, which merely created an issue of proof. The principles discussed in Anangel Atlas Compania Naviera SA v Ishikawajima-Harima Heavy Industries [1990] 2 Ll.Rep. 526 and Whitecap v John H Rundle [2008] EWCA Civ 429 were applied.
4. The court should give effect to an interpretation that made the parties’ agreement workable. A dispute about meaning, contractual application or the facts did not itself establish legal uncertainty. The guidance in GLC v Connolly [1970] 2 QB 100 and Scammell v Dicker [2005] EWCA Civ 405 was applied. A provision would nevertheless be void where no conclusion could safely be reached as to the parties’ objective agreement, as explained in Arnhold & Co Ltd v Attorney General of Hong Kong (1989) 47 BLR 129.
5. Section 5 covered the works necessary to provide the new operational baggage system, including works in the new pier, works in the existing building needed to make the system operational, and Beumer’s work in relation to the airport operational readiness trials. Section 6 covered works necessary to remove redundant facilities and provide associated infrastructure after the new system became operational. Disconnection of redundant baggage equipment and temporary carousels fell within section 6, subject to any particular disconnection being necessary to make the new system operational. Any dispute on that question was evidential, not conceptual.