Wembley verdict: Multiplex 'ruthless, but lawful'

Multiplex has come out on top in the judgment in the £50m legal battle with steel contractor Cleveland Bridge over the Wembley Stadium project.

Mr Justice Jackson today told the Technology and Construction Court that CBUK was in repudiatory breach of contract by walking off the site on 2 August 2004. He rejected claims by CBUK that Multiplex had been in repudiatory breach of the contract before CBUK walked off.

Jackson said that although in his view Multiplex had breached the contract in one respect - it had not adequately consulted CBUK before issuing payment certificates for amounts lower than those claimed by CBUK in July 2004 - this breach was not serious enough to be considered repudiation.

Jackson said: "Multiplex issued certificates at the lowest valuations it believed it could defend. This strategy, although ruthless, was lawful."

He went on to condemn Multiplex's actions in this respect, but said that that still did not mean Multiplex had acted outside the law. He said: "I do not condone Multiplex's breach of contract on 16 July, I deplore it. But that breach of contract had no future implications and so was not repudiatory."

In a further blow for Cleveland Bridge, Justice Jackson also ruled that the disputed £32.66m figure, which CBUK claimed was a "final and binding" valuation for its work to 15 February 2004, was intended for cash flow only.

Jackson rejected claims by CBUK that a final figure had been agreed, but was omitted from the Supplemental Agreement for Multiplex's internal political reasons.

Jackson said: "It does not make sense for two major construction companies entering into a formal agreement deliberately to omit a crucial term on which they had agreed…Relations between the two had been acrimonious to say the least. CBUK did not trust Multiplex, and if they had negotiated a figure, they would have insisted it was included."

Justice Jackson insisted that neither party could claim an outright victory, with Cleveland Bridge achieving success on some of the more minor points of the trial. However, the judgment leaves Multiplex firmly in the driving seat over subsequent damages. The companies must now decide whether to settle these through mediation, or return to the High Court next January.

Multiplex's lawyers indicated today that they would seek an interim costs order. The case was adjourned until tomorrow when the judge will comment on this, and will hear any application for a leave to appeal from CBUK.