Case relate to works undertaken when contractor was part of Interserve
A High Court judge has ordered Tilbury Douglas to pay Northumbrian Water over delays to a water treatment works job undertaken by an Interserve joint venture.
Interserve went into administration in 2019 after shareholders voted down a deleveraging plan, resulting in subsidiary companies being sold and eventually to Tilbury Douglas separating from the group to operate as a sole contractor.
The firm, along with join venture partner Doosan Enpure, will pay £22.4m to the water company after an adjudication decision was ruled to be valid and enforceable.
The joint venture of Interserve Construction and Doosan Enpure was appointed to design and build the Horsley water treatment plant in 2016.
But disputes over cost overruns, delays to works and quality issues led the water company to terminate the £37m contract in May 2021, later claiming £51m for contractor default.
The joint venture disputed the sum and claimed it was entitled to £33m from the client, but last May an adjudicator found the termination of contract was valid, ordering the JV to pay £22.4m plus interest of more than £300,000 and further interest of £1,500 per day until the balance is settled.
The following month, the contractors applied for arbitration, but this week Justice O’Farrell at the Technology and Construction Court ruled the decision valid and enforceable, deciding there was no justification for a stay of proceedings for arbitration.
A spokesperson at Tilbury Douglas said: “This court ruling refers to a legacy joint venture project, therefore, Tilbury Douglas only has an obligation for a share of the settlement sum, which has already been accounted for in its trading position.
“We will make no further comment on commercial matters.”
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