Jurisdiction in International Arbitration

International arbitration is, by its very nature, multi-jurisdictional. The international element could come from the parties being located in different jurisdictions, or perhaps having elected to refer disputes to a forum connected to a jurisdiction common to one, all or none of them. There are many factors that play into this decision. For example, one party may want ‘home court’ advantage, or be concerned as to the limit of remedies available in the jurisdiction where the underlying work is taking place. Another party may be more familiar with dispute resolution within a specific jurisdiction, or have easier access to resources if a dispute is determined in a certain place. The overlay to this is the governing law agreed between the parties – it is not unusual for an arbitration tribunal in one jurisdiction to determine a claim governed by the laws of another jurisdiction. The governing law and jurisdiction can be entirely unrelated to the location of the subject matter of the contract.

To read the full text of this post by Duane Morris attorney Chris Recker, please visit the Duane Morris International Arbitration Blog.

Social Security Benefits: Increases to Statutory Payments

By Nic Hart

On 14 March 2023, the Social Security Benefits Up-rating Order 2023 made increases to the rate of payment for statutory sick pay (SSP) as well as statutory maternity, paternity, adoption, shared parental and parental bereavement pay.

The new rates are as follows:

    • SSP: £99.35 to £109.40.
    • Statutory maternity, paternity, adoption, shared parental and parental bereavement: £156.66 to £172.48.

The increased payment rate for SSP will come into force on 2 April 2023, and the new rates for statutory maternity, paternity, adoption, shared parental and parental bereavement will apply on 6 April 2023.

The full Social Security Benefits Up-rating Order 2023 can be viewed at legislation.uk.gov.

UK Construction and Engineering Adjudication 2022 – A Year in Review

By Vijay Bange and Sam Laycock

Coulson LJ could not have encapsulated Adjudication more succinctly:

It is not an alternative to anything; it is the only game in town.[1]

In the UK construction and engineering industry adjudication remains the main forum and means for resolution of disputes, many of which are complex and significant in value. In this blog the author looks at, and summarisers, the salient points arising from an illuminating report arising from a collaboration between The Adjudication Society and the team at Kings College[2], led by Professor Renato Nazzini and Aleksander Kalisz. The collation of data from the questionnaire(s) looks at emerging trends and identification of areas of further refinement in the process. Continue reading “UK Construction and Engineering Adjudication 2022 – A Year in Review”

New Compulsory Registration Requirements for Non-UK Entities Holding Real Estate in the UK

Various provisions of the Economic Crime (Transparency and Enforcement) Act 2022 (the Act) came into effect on 1 August 2022 with the intention of increasing the transparency of the ultimate ownership of UK real estate and prevent the use of non-UK entities by those seeking to disguise ownership for the purpose of money laundering or other illegitimate purposes.

The Act has introduced new compulsory requirements for any non UK corporation, partnership or other entity that is a legal person under its governing law (Overseas Entity) that owns or acquires a qualifying estate in any real estate in the UK to register itself and details of its managing officers (e.g. director, manager or secretary) and beneficial owners at UK Companies House in a newly created Register of Overseas Entities (ROE).

To read the full text of this Duane Morris Alert, please visit the firm website.

 

Red or white…(Diesel that is)

Limitations on the use of red diesel for the construction and engineering sectors UK.

Glasgow and COP26 resulted in various commitments from global economies to work towards targets in the reduction of greenhouse gas emissions. The UK is to target the reduction of greenhouse emissions to net zero by 2050.

However, even prior to COP26 there were already legislative changes afoot to have cleaner air. The Finance Bill 2021, and the associated secondary legislation, as part of the government’s plans to reduce carbon emissions, has the effect of restricting the usage of red diesel after April 2022.[1]

What is red diesel? In short it is regular (white) diesel that is dyed to make it identifiable. Why? It is taxed at a much lower rate, making it almost 50 pence a litre cheaper than white diesel. That discount will end for those industry sectors that have used it, but are now restricted from its usage post April 2022.

Construction and manufacturing industries cannot use red diesel after April 2022. These are sectors that use the rebated red diesel. In the construction industry, site electricity generators along with heavy plant, machinery and heavy vehicles will all now be forced to run on white diesel to a much higher cost.

There is pressure on all industry sectors to adopt green measures. This is now increasingly becoming the norm, and is affecting virtually all businesses and sectors. By way of illustration, Lloyds Bank has announced that in relation to green homes, when looking at affordability  there will less stringent stress testing.[2]

The governments stated aim is to encourage businesses affected by the red diesel restrictions to use less fuel, or eventually to adopt greener alternatives. However, few in the construction industry would use more fuel than absolutely necessary, so in order to avoid cost inflation, there needs to be alternative options that the construction and engineering sectors must have.

So have we got the alternative technology to give viable options? For example, electric powered plant or cleaner fuels such as hydro treated vegetable oil. Is there scope for future use of Hydrogen power? As we have previously discussed in this blog, significant strides have been made in this area to date and there are a number of construction vehicle suppliers now providing a broad range of electrically-powered construction machinery. However, despite this, diesel power is still dominant in the sector and in some areas there are few, if any, alternatives available.

For the construction, engineering and energy sectors, the following points arise for consideration and debate:

    • Super inflation in the construction, engineering and energy sectors is a massive issue in the UK, and indeed in other parts of the world. Rising supply costs and increased energy prices have dogged the industry in 2021. This loss of rebate is likely to result in yet further increases to site and project costs. In turn this is likely to increase the pressure on the bottom lines of many companies in the sector, and is in turn likely to mean more expensive houses, hospitals, schools, road projects and so on. This is a pertinent issue in the UK in particular, given the shortage of affordable housing and the current issues surrounding the state of disrepair of some of the housing stock in inner cities.
    • Against this, the government is not forecasting significant macroeconomic benefits in terms of increased tax revenue – meaning that a government already short of cash thanks to the Covid-19 pandemic will likely have to pay more for its construction projects, with no substantive additional money coming in against which to offset that cost.
    • Concrete processing plants will be affected by steep cost rises. To state the obvious, concrete is a key ingredient on any construction project, and is the most widely used material in the world!
    • It is being reported that in Northern Ireland the cost to construction businesses could be as much as £25M per year.[3]
    • Plant and machinery that is no longer eligible to use red diesel must be drained, flushed and cleaned. Furthermore, any usage outside the permitted circumstances may result in confiscation of plant and machinery. In practice this may create a significant administrative burden on companies in the short term.
    • Whilst the industry accepts the need to embrace green practices to strive towards net zero carbon emissions by 2050, some argue that the changes being implemented are possibly too soon, and before alternative fuels and/or technologies are in place.
    • Have we actually got readily available alternative green options? At present, is the only viable option arguably to switch to white diesel only, and if so, does that really reduce the carbon emissions from the usage of red diesel? In reality the answer is no, unless a cleaner source of fuel is available. This in turn leads to a need for potential machinery modifications to accommodate such fuels. Additionally, problems may grow for plant hirers when machinery is hired consecutively by unaffected and then effected industries. Plant and machinery in the construction industry, often represent considerable assets of a business. If the idea is that these will become obsolete, this will present further problems for the sector.
    • The government’s thought process, on the other hand, appears to be that necessity is the mother of invention, and increasing fuel costs will drive down emissions created by the construction industry.
    • Those in the industry cannot be expected to absorb these costs, and the inevitable effect will be that these additional costs of running plant machinery, concrete manufacture and quarry operations, to name a few, will need to be passed onto the end users.
    • As with all cost increases there will inevitably be considerable impacts on current projects. For contractors bound into contracts that prohibit price changes or increases for these matters, this change alongside the current price hyperinflation dogging the industry could prove fatal.
    • Equally, increased fuel costs and price hyperinflation will increase the uncertainty around tendering for work. Prospective contractors will need to consider carefully the risks posed by these cost increases and how they are likely to be affected in the long term.

[1] Rail transport, agricultural, fishing and water freight, amateur sports clubs, golf courses, non-commercial power generation, traveling funfairs and circus.

[2] The Sunday Telegraph, 23 January 2022. This on basis that green homes are more efficient to run, and there will be lower outgoings.

[3] BBC News 24/01/2022-Red Diesel loss ‘could cost businesses millions’

“And That’s Another Fine Mess You’ve Gotten Me Into:” Disputes in the Construction, Engineering and Energy Sectors

By Vijay Bange

The timeless catch phrase is of course from the famous comedy duo Oliver Hardy and Stan Laurel. Looking beyond the blame game is important. Problems will inevitably arise with complex large infrastructure projects. Understanding the underlying reasons and what the root causes are will perhaps aid in the process of reducing conflict. Continue reading ““And That’s Another Fine Mess You’ve Gotten Me Into:” Disputes in the Construction, Engineering and Energy Sectors”

The Digital Age Still Needs Infrastructure

I am an unashamedly massive fan of the Back to the Future film franchise. Yes, even the sequels.

One of my favourite lines from the franchise is spoken at the end of the first film and the beginning of the second. Doc, Marty and Jennifer are about to travel to the distant future (2015, to be precise). When Marty points out there might not be enough road to get up to 88 mph, Doc flips down his brushed aluminium shades and intones: “Roads? Where we’re going we don’t need roads.” And the DeLorean flies off to the future thanks to an early 21st century hover conversion.

Brings a smile to my face every time

Continue reading “The Digital Age Still Needs Infrastructure”

Luck of the Law: Lessons to be Learned from Green v Petfre

They say that the house always wins, but as the recent case of Andrew Green -v- Petfre (Gibraltar) Limited t/a Betfred  illustrates, even the house can get caught out sometimes.

When lucky punter Andrew Green won over £1.7m following a 5 ½ hour stint on Betfred’s ‘Frankie Dettori’s Magic Seven Blackjack’ game in January 2018, he was dismayed to find out a few days later that the company was refusing to pay out, claiming that there was a glitch in the game, and that the house rules stated that, in those circumstances, Betfred were not required to pay. Mr Green sued, and the matter eventually ended up in Court. Following a hearing on 15 October 2020, Mrs Justice Foster DBE granted Mr Green summary judgment and awarded him his winnings.

Continue reading “Luck of the Law: Lessons to be Learned from Green v Petfre”

A step too far?

A step too far?

    • Third party consultants, and duty of care in tort.
    • No duty of care owed in tort by a third party design consultant to a contractor with no direct contractual nexus.

Large infrastructure projects are often subject to intricate contractual relationships between the relevant stakeholders, and this will also include collateral warranties to cover any potential gaps in liability to mitigate potential effects of one of the participants in the contractual matrix becoming insolvent. Parties lower down the contractual chain may engage their own designers or consultants to discharge their obligations up the contractual chain. An interesting scenario arose in the recent case Multiplex Construction Europe Ltd v Bathgate Realisations Civil Engineering Ltd (Formerly Dunne building & Civil Engineering Ltd (In administration) (2) BRM Construction LLC (3) Argo Global Syndicate 1200 (2021) , and the two issues that were heard by way of preliminary issue.

The facts:

    • The main contractor sub-contracted certain design works to the sub-contractor.
    • In turn the sub-contractor sub-contracted certain design work to the designer (Second Defendant).
    • There was a requirement pursuant to BS 5975 for certain independent design checks and approvals to be done by an independent third party. For that reason, and to discharge its contractual obligations to the main contractor, the sub-contractor engaged a firm of consulting engineers to do this, and issue the relevant certificates.
    • The contractor alleged that defects issues arose because of design issues.
    • The contractor issued proceedings against the sub-contractor and the designer.
    • Judgment in default was obtained against both.
    • The sub-contractor was in administration. The designer was uninsured. The consultant had gone into liquidation.
    • The contractor pursued the consultants insurers.
    • There were two preliminary issues that were dealt with by His Honour Judge Fraser, sitting in the TCC:

Continue reading “A step too far?”

UK Construction & Engineering: Safer Construction Materials- A New National Regulator

By Vijay Bange

Following our recent blog concerning the challenges and issues in the construction industry arising post Grenfell and the Dame Hackitt Review, the Government continues with its mission to tackle some root safety concerns. One of the many recommendations made was that more needs to be done to ensure that construction products are robustly tested, certified and labelled, and that there needs to be  a more robust regulatory framework to police this. Furthermore, to ensure that there is greater accountability for those manufacturing and /or selling dangerous building products.

The Housing Secretary, Robert Jenrick, announced on 19th January 2021[1] the establishment and funding of a national regulator[2] working closely with the Building Safety Regulator and trading standards, and indeed other regulators, whose remit would be to ensure that safer materials are used to build homes. The issue is no longer limited just to dangerous cladding and is more wholesale. This was a scathing, and candid, account of the perceived deficiencies in the industry. Separately, the government has also commissioned a panel of experts to look into the fitness of testing regimes for construction products, and tackling abuse of testing products used for construction, and it is anticipated that this review will report its findings this year. Potentially, this too may result in further changes to the relevant regulations. What is evident is that there is a multi-pronged effort to make changes to implement safety concerns post Grenfell, and implement the measures arising from the Dame Hackitt Review.

Continue reading “UK Construction & Engineering: Safer Construction Materials- A New National Regulator”

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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