M+W Group faces £133m claim over Hull energy plant

Aaron Morby 4 years ago

Engineering contractor M&W Group is facing a £133m claim for the late delivery of a £200m green energy plant in Hull.

Hull energy plant at the centre of the court action
Hull energy plant at the centre of the court action

The legal battle has arisen after the group’s subsidiary MW High Tech Projects failed to meet targeted completion and saw its main contract terminated by client Energy Works Hull.

Both firms are now heading for the High Court with claims and counterclaims stemming from failure to deliver the project, termination of the main contract and assignment of a key subcontract package.

Client Energy Works Hull is claiming £133m to cover the cost of rectifying defects, delay damages and added costs to complete works.

MW disputes the claims and has counterclaimed for £46.7m based on the contractual provisions for payment following a termination for convenience.

MW won the contract to design, procure, construct, commission and test the fluidised bed gasification power plant back in November 2015.

It claims delays in commissioning stemmed from the client’s failure to provide refuse derived fuel (RDF) that was compliant with the contractual specification.

This delayed commissioning when the RDF was rejected by MW and led to the failure of commissioning when key subcontractor Outotec’s plant was damaged as a result of the non-compliant RDF.

It also claims that Outotec’splant was delivered late and was defective.

Details of the legal row emerged in a preliminary hearing covering legal points in the complex case.

Outotec’s work was assigned to the client when the main contract was terminated in March after MW failed to achieve targeted completion in April 2018.

In preliminary hearings, its was ruled that the assignment of accrued and future rights to Energy Works Hull prevented MW from seeking an additional claim against Outotec for liquidated damages under the subcontract.

The judge also ruled that other complex issues relating to the legal battle and proportions of damages would be determined at the full trial.

The project has already been the subject of two other courtroom battles.

The most recent saw small specialist pipework firm Premier Engineering Lincoln win a £615,000 payout from MW from contested supply of labour, supervision and materials invoices.

The other saw MW successfully overturn an adjudicator’s ruling in favour of a £368,000 payment to subcontractor Engie Fabricom (UK).

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