Wind farm client takes Alfred McAlpine Business Services to court after losing an arbitration over liquidated damages

A newly opened wind farm in Scotland is headed for a High Court showdown with civil engineering contractor Alfred McAlpine Business Services.

Braes of Doune Wind Farm (Scotland), which provides 72 megawatts of electricity from 36 wind turbines, was opened a year ago and has the capacity to power 45,000 homes.

McAlpine won the contract to design, build and commission the wind farm, which is equivalent to two coal fired power stations, but disputes arose between the two sides and they took their differences to arbitration last August.

McAlpine argued that Braes was not entitled to withhold milestone payments and claimed damages of £3,397,464.

The arbitrator reached a decision on 17 December 2007, in which he ruled that Braes was not entitled to keep liquidated damages, and decided that McAlpine’s counterclaim should be paid.

He awarded £2,836,840.30 plus VAT to McAlpine, and ordered Braes to pay interest at 1.5% above base rates.

But now Braes is seeking leave to appeal against his award on questions of law, and is asking if the contract was so uncertain as to be unenforceable, or if it was entitled to withhold delay damages against money otherwise due to McAlpine.

Braes is also asking if McAlpine was entitled to an award in respect of the withheld liquidated damages. A decision on the questions of law will decide whether Braes was entitled to withhold the damages or whether McAlpine is entitled to payment of the sum awarded, the writ says.

Braes argues that the arbitrator’s decisions on the questions of law were obviously wrong and says that his decisions flowed from his misconstruction of words referring to the totally installed capacity for the plant.

The wind farm was officially opened by Alistair Darling. It is run by Airtricity. The wind turbines were designed and built by Vestas-Celtic Wind Technology.