Geoquip Marine Operations AG v Tower Resources Cameroon SA & Anor

In a contract providing standby charges for delay caused by late delivery of the other party’s materials, services or facilities, those words take their natural meaning in context. They may include obligations to provide security and obtain permits and a licence extension. A condition precedent to commencement may be waived. After waiver, the relevant contractual obligations and standby provision continue to operate. Where concurrent causes of delay are each within the clause, recovery does not depend on identifying a single dominant cause. An appellate court should not permit a late amendment introducing a new causation case where it was not advanced below, would require a retrial and is unnecessary to decide the appeal.

Geoquip claimed against Tower under a contract for offshore geotechnical investigation services and on the basis of estoppel. It sought the contractual lump sum and standby charges for delay allegedly caused by Tower’s failure to secure a licence extension and provide permits and security.

The Deputy Judge of the High Court awarded the lump sum but dismissed the standby claim: [2022] EWHC 531 (Comm). Permission to appeal on estoppel and costs was refused. Permission was granted on contractual interpretation and causation. The central questions were whether clause 4.5 covered Tower’s obligations, whether waiver of the condition precedent affected that conclusion, and whether the causation findings should be reopened.

The Court of Appeal allowed the appeal on the ground for which permission had been granted, but refused permission to amend Geoquip’s appellant’s notice.

1. Scope of clause 4.5. The words “materials, services and facilities” had to be given their natural meaning in the context of the Contract as a whole. They were broad enough to include Tower’s express obligations to provide security and obtain the necessary permits and licence extension under section 10.2 and clause 34.
2. Waiver of the condition precedent. Tower’s payment, and Geoquip’s acceptance, of the US$250,000 deposit waived reliance on the condition that the licence extension and permits be delivered before the Vessel departed for Cameroon. Following that waiver, Tower remained obliged to secure them, and clause 4.5 applied to delay caused by its failure to do so timeously. The waiver did not abrogate those obligations or the potential liability for standby charges.
3. Concurrent causes. It was unnecessary to decide whether the licence issue or the absence of security was the dominant cause. The judge had found concurrent causes, and Tower was responsible for each cause falling within clause 4.5. The court referred to the concurrent-cause principle stated in the joint judgment of Lords Hamblen and Leggatt in FCA v Arch Insurance (UK) Ltd & Ors [2021] UKSC 1, [2021] AC 649 (SC). The judge’s error was not the finding of concurrent causes, but the conclusion that the standby provisions did not survive waiver and the failure to award the charges.
4. Appellate procedure. The parties could not properly advance competing sole-cause cases for the first time on appeal. The proposed amendment was late, had not been advanced below, would require a new trial and was unnecessary to resolve the appeal. The Court therefore declined to reopen the factual causation findings.

Geoquip was awarded an additional US$1,619,541.69 in standby charges.

• Court of Appeal (Civil Division): Allowed Geoquip’s appeal on contractual interpretation and awarded the standby charges. Permission to amend the appellant’s notice was refused.
• High Court of Justice, Commercial Court: In [2022] EWHC 531 (Comm), the Deputy Judge awarded the contractual lump sum but dismissed the standby-charges claim under the Contract and estoppel.