Centre Point Tower developer claws back £1m from McAlpine

Aaron Morby 6 years ago
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The developer behind London’s Centre Point tower conversion into luxury apartments has clawed back a £1m payment to Sir Robert McAlpine in the High Court.

Developer Almacantar and McAlpine became pitched against each other following a bust-up over delivering the project as a design and build job.

McAlpine was working on the £100m-plus project under a pre-construction service agreement (PCSA) signed in Spetember 2012. But by June 2014 ahead of moving to the next main contract stage, McAlpine said it would no longer entertain a design and build contract and proposed a construction management or management contract form of procurement.

Almacantar rejected the offer and the contract was terminated in September. Three months later Almacantar appointed Multiplex as the main contractor for the job.

The two then became embroiled in a dispute about whether the contract terms allowed a final part of McAlpine’s fee to be released under the PCSA agreement.

McAlpine contended that the previous two-stage contract terms allowed it to be paid a remaining 50% tranche of fee when any main contractor was appointed.

Almacantar argued that the terms of releasing the second part of the fee only applied once a main contract was agreed with McAlpine, not any other contractor.

Initially an adjudicator ruled in McAlpine’s favour, but the High Court has now backed Almacantar, ordering McApine to repay the £1.1m including interest awarded in the adjudication.

Justice Jefford said: “This is not a contract under which, if Almacantar exercised its right to terminate, it would, with impunity, avoid paying the second 50% of the fee.

“The purpose of the PCSA was to put Almacantar in a position to proceed with a well-planned design and build contract with developed contractor’s proposals and a robust contract sum.

“In most circumstances in which Almacantar terminated SRM’s engagement, Almacantar would to a greater or lesser extent lose those benefits and have to go back to the drawing board with another contractor.

“That would be the position if the parties could not reach agreement, if Almacantar was dissatisfied with SRM or if, as happened, SRM did not wish to proceed.”

Justice Jefford added: “The only circumstance in which Almacantar would have a windfall  – but a fairly valueless one – and SRM would be unfairly out of pocket would be if Almacantar decided not to proceed with the project at all.

“If on the other hand SRM’s construction of the PCSA were right, they would receive the second 50% of the fee even if its services had been of no benefit to Almacantar in engaging with another contractor.”

 

 

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