Multiplex in £7.5m cladding row over Boomerang Tower

Aaron Morby 5 years ago
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Multiplex and Chinese facade contractor Yuanda are locked in a payment dispute over delays on the landmark One Blackfriars tower project in London.

Delayed delivery of 50 storey One Blackfriars at heart of payment dispute
Delayed delivery of 50 storey One Blackfriars at heart of payment dispute

Luxury developer St George employed Multiplex as main contractor to deliver the luxury riverside flats project, nicknamed the Boomerang.

Because of late delivery, Multiplex has agreed to pay liquidated and ascertained damages capped in its contract at £7.5m to St George, a subsidiary of the Berkeley Group.

Without this cap, it is said in court papers that Multiplex’s potential liability for delay could have been as high as £55m.

Last November, Multiplex demanded £7.5m by way of LADs from Yuanda (UK) over the project delay.

Yuanda has denied that it was responsible for the delays and has also submitted a claim for its final account to Multiplex.

It has been paid £41.9m for works, and maintains that the total amount of its final account including a sizeable amount for loss and expense should be £48.9m.

The dispute has gone to adjudication with a result expected later this month.

Details of the payment dispute emerged in court documents after Yuanda took out a court injunction to prevent Multiplex drawing down a £4.4m ‘guarantee bond’ held on the cladding contractor’s performance.

A high court judge has now ruled that the guarantee bond is a performance and not on-demand bonds and Multiplex must await the outcome of the adjudication before seeking to draw it down.

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