Saga Cruises BDF Ltd v Fincantieri SpA [2016] EWHC 1875 (Comm)
A recent case has brought concurrent delay, an area of law that continues to spark debate, back into focus. Broadly speaking, concurrent delay occurs where there is delay on a project which is caused both by an event or events for which the Employer is responsible and by an event or events for which the Contractor is responsible.
Issues then arise regarding whether the Contractor is entitled to an extension of time and loss and expense, or whether instead the Employer is entitled to liquidated damages.
In the Saga Cruises case this situation arose. Fincantieri (referred to throughout the judgment as “the Yard”) was contracted by Saga Cruises BDF Ltd (“Saga”), part of the Saga group to repair and refurbish a cruise ship. In accordance with the contract, as amended, the Yard was to deliver the ship, with the works to it complete, by 2 March 2012. The ship was not delivered until 16 March 2012. Saga claimed liquidated damages in respect of the 14 day delay, which were capped at 770,000 Euro.
Reviewing the authorities, the judge summarised the position stating that:
“A careful consideration of the authorities indicates that unless there is a concurrency actually affecting the completion date as then scheduled the contractor cannot claim the benefit of it. Causation in fact must be proved based on the situation at the time as regards delay.”
Therefore, where the Contractor is in delay, it must show that delays for which the Employer was responsible actually contributed to the delay. The judge reviewed Employer and Contractor delay events and applied this principle. She held that 4 out of the 5 delay events relied on by Saga as entitling it to liquidated damages, due to contractor delay, were validly claimed and therefore Yard were liable for liquidated damages. In relation to the events claimed by the contractor, the judge held that the owners were responsible for a number of delays. However, by this stage, the works were already delayed and so these events were not the cause of the delay. Putting it another way, the judge said that the Yard had been responsible for a number of delays and therefore it “is not entitled to rely on delays for which the Owner was responsible during this period, as stopping time running under the liquidated damages clause”.
In this way the case provides further illustration of the principle of concurrent delay. The rule that where there are concurrent delays, the Contractor is entitled to time but not money, i.e. an extension of time but not loss and expense, still stands. However, where one party is in delay and then the other party causes a delay, this rule will not apply. Concurrency must be established on the facts first.