Darchem Engineering Limited v Bouygues Travaux Publics & Anor

Where a subcontract is made with joint-venture entities, the constituent companies are not separate contractual “Parties” merely because they sign the deed or assume joint and several liability. The contract must be construed as a whole, giving effect to defined terms and reconciling its provisions where possible. Specific deeming provisions may show when a reference to a joint venture is intended to include its constituent companies. A constituent company therefore cannot commence adjudication in its own name unless the contract confers that right or the company has authority to act for the joint venture.

Darchem Engineering Limited applied for summary judgment to enforce an adjudicator’s decision requiring payment of approximately £23.9 million. The subcontract concerned works for the Hinkley Point C nuclear power station and was made between two unincorporated joint ventures: BYLOR, comprising Bouygues Travaux Publics and Laing O’Rourke Delivery Limited, and EDEL, comprising Darchem and Efinor Limited.

Darchem had brought the adjudications alone, asserting that it acted jointly and severally as subcontractor. BYLOR challenged jurisdiction on the basis that Darchem was not itself a party to the subcontract and lacked authority to commence proceedings alone. The central issue was whether Darchem was a “Party” for the purposes of Option W, clause 2.2.

1. The application was dismissed. Darchem was not a “Party” of the subcontract as defined and could not invoke Option W, clause 2.2, in its own right.
2. The subcontract was construed objectively as a whole. The conditions consistently used “Party” and “Parties” in a bilateral sense, referring to the Contractor and the Subcontractor as the two joint ventures. Clause 11.2(11) defined “Parties” as those two entities.
3. The wording that all named entities were together known as the “Parties” grouped the four signatories into the two contractual parties. It did not create four, or potentially six, separate parties. Each constituent company’s execution of the deed was neutral because an unincorporated joint venture lacked separate legal identity.
4. Clauses 91.1 and 91.2, which expressly deemed references to a joint-venture party to include its constituent companies for limited termination purposes, supported the inference that “Party” did not generally bear that wider meaning. Clause X4.1A similarly treated the Subcontractor as a single entity for the relevant purpose.
5. Clause 12.6 imposed joint and several liability and addressed authority to bind the Subcontractor. It did not confer an automatic unilateral entitlement on a constituent company to commence adjudication, particularly where BYLOR rejected Darchem’s asserted authority.
6. The principles in Triple Point Technology, Inc v PTT Public Company Ltd [2021] UKSC 29 and McEvoy v The Belfast Banking Company Ltd [1935] AC 24 did not assist because they presupposed that Darchem was a contractual party.