MT Højgaard (MTH) has to foot the bill for the €26.25m repair costs on E.On’s Robin Rigg offshore wind farm in the Solway Firth.
The foundations of 60 wind turbines installed by MTH failed shortly after completion due to a calculation error in an international design standard contained in the employer’s technical requirements.
The technical requirements required MTH to (a) comply with the international standard as a minimum (which referred to a 20-year lifespan) and (b) made it clear that it was MTH’s responsibility to identify whether there was a need for a more rigorous requirement.
The Supreme Court ruled that as a matter of basic principles of contractual interpretation (applying the natural meaning of the words in the contract) (i) MTH should have ensured that the design was satisfactory; (ii) MTH had provided a warranty that the foundations would have a design or service life of 20 years; and (iii) E.On was entitled to rely on that warranty.
Colette Morgan-Ford, partner at national law firm Weightmans, said after the ruling: “The Supreme Court’s judgment is a stark reminder that the courts are reluctant to interfere in the bargain struck between parties if the words in the contract (taken as a whole) are clear and consistent.
“Contractors need to ensure that at pre contract stage all documents are read and that the meaning of obligations are clearly understood, including those tucked away in other contract documents.
“Each case turns on its facts and the specific words in the contract, but, the Supreme Court has now made it clear that a contractor who bids on the basis of a defective specification provided by the employer may only have themselves to blame if they do not check their practicality and they turn out to be defective”