Balfour Beatty Engineering Services – formerly known as Haden Young – is suing contractor Shepherd Construction for £1.4m in a row over a £65m hospital development in Hull.

BBES had been hired by the main contractor to carry out M&E works on new facilities at Castle Hill hospital in April 2007.

In a writ filed at the High Court, Balfour Beatty claimed that Shepherd had deducted £2.2m from its payment after the subcontract works came in five months late.

However, on 2 July, an adjudicator ruled that the subcontract completion date should be extended to 10 June 2008, and that Shepherd was not entitled to deduct the costs.

Shepherd was also ordered to cover the adjudicator’s fees and expenses which, added to the other sums, totalled over £1.4m, plus interest and costs.

According to the writ, Shepherd has failed to pay the money and its “final account statement” on 13 July indicated it did not intend to pay.

An initial hearing is due next week.