Cases - Strachan & Henshaw Ltd v Stein Industrie (UK) Ltd and GEC Alsthom Ltd
Record details
- Name
- Strachan & Henshaw Ltd v Stein Industrie (UK) Ltd and GEC Alsthom Ltd
- Date
- (1997)
- Citation
- 87 BLR 52
- Legislation
- Keywords
- Construction claim - loss and expense claim - damages - exclusive remedy
- Summary
-
This decision of the Court of Appeal concerned an appeal from an arbitration arising out of works carried out under a subcontract relating to the construction of a combined cycle gas turbine power station in Cambridgeshire. The contract contained, at clause 44.4, what is sometimes referred to as an 'exclusive remedy' clause:
'The Purchaser and the Contractor intend that their respective rights, obligations and liabilities as provided for in the Conditions shall be exhaustive of the rights, obligations and liabilities of each of them to the other arising out of, under or in connection with the Contract or the Works, whether such rights, obligations and liabilities arise in respect or in consequence of a breach of contract or of statutory duty or a tortious or negligent act or omission which gives rise to a remedy at common law. Accordingly, except as expressly provided for in the Conditions, neither party shall be obligated or liable to the other in respect of any damages or losses suffered by the other which arise out of, under or in connection with the Contract or the Works, whether by reason or in consequence of any breach of contract or of statutory duty or tortious or negligent act or omission.'
The Court of Appeal held that if the parties wished to limit their potential liability to one another as so provided by clause 44.4, there was no reason why the law should prevent them, even if it rendered 'worthless' an action in damages for breach of a contractual right.
It is submitted, however, that a tribunal will construe a clause which gives a contractor the right to claim for losses caused by any particular breach (e.g. a loss and expense clause) broadly where it is the contractor's exclusive remedy. Whilst such a clause could include conditions precedent to recovery, a Tribunal may be slower to give effect to such a construction in the face of an exclusive remedy clause unless the wording of the agreement allows no other outcome.