Jurisdiction(s):
United Kingdom

TCC (England and Wales): Prior notice under 43.1A was a condition precedent to termination; 'absolute discretion' concerned starting the process only (Interserve v Hitachi)

Published on: 01 November 2017

Published by a LexisNexis Construction expert

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Article summary

Original news Interserve Construction Ltd v Hitachi Zosen Inova AG [2017] EWHC 2633 (TCC), [2017] All ER (D) 82 (Nov)

What are the practical implications of this case?

Although the outcome rested largely on the parties’ bespoke terms, the case underscores the need to examine termination provisions with care both when contracting and before attempting to terminate. It also indicates that, when interpreting the parties’ chosen wording, the court is unlikely to construe it in a manner that fails to give operative effect to expressions such as ‘subject to’.

What was the background?

Hitachi, the EPC contractor for an energy from waste plant in Worcestershire, engaged Interserve as sub‑contractor. Dissatisfied with Interserve’s performance and delay, Hitachi served a notice under sub‑clause 43.1 of the sub‑contract, invoking grounds (h) and (q). Those grounds provided that, if Hitachi failed to proceed regularly or diligently with the works or committed a material breach: ‘…then, subject to Sub‑Clause 43.1A and without prejudice to any other rights or remedies which’...

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