In the construction sector solid cash flow throughout the supply chain is the lifeblood of most projects, no matter what size, and is arguably the single most important factor in ensuring that a project reaches its conclusion. However, the cumulative effect of various other factors such as Brexit, escalating global energy prices, the outlawing from 1 April 2022 of the use of the red diesel usage for construction plant, super inflation, higher material and labour costs and the end of government COVID-19 support schemes has led to increased lending costs and smaller profit margins. As such, the construction supply chain is likely to come under ever increasing pressure in 2022. Continue reading “Under Pressure: Struggling Supply Chains”
The global pandemic continues to challenge us, with various measures ranging from further lockdowns to restrictions on in-person meetings. The judicial machinery, including that in the arbitration world, has continued to function throughout the pandemic notwithstanding the difficulties of embracing innovative processes and new technology.
In January 2021, Vijay Bange wrote an article examining the challenges of using technology in formal dispute resolution proceedings. Whilst technology has of course been used in international arbitration and high court litigation (particularly in the Technology & Construction Court) for quite some time, that use has been somewhat limited with parties, their legal counsel, and the tribunal often preferring in-person hearings and hard copy papers. 2021 however saw a dramatic rise in the use of technology in dispute resolution proceedings. This was almost certainly borne out of necessity as a result of the COVID-19 pandemic, rather than necessarily by choice or organic progression. If disputes were to continue to be resolved, parties had no option but to get to grips with remote hearings, electronic bundles and virtual breakout rooms. Whilst some inevitably faced technological and logistical stumbling blocks, the move to virtual hearings and electronic working proved largely successful with many disputes being resolved expeditiously along the way. In fact, the move towards technology was so successful that many people are now opting to use technology out of choice and not simply out of necessity. Continue reading “Using Technology in Arbitration: Necessity or Choice?”
Globally, notable incidents of freak weather events giving rise to destruction and death have dominated the news. The increasing frequency of these erratic climate events has undoubtedly raised awareness of global warming and, on a political level, the need for states to move quicker towards green energy and the reduction of carbon emissions. Global warming is an inescapable issue that affects us all and which has forced governments to elevate this to the top of the agenda, filtering down to economic policies that will touch upon most industry sectors.
On 31 October 2021, representatives from over 200 countries are set to descend on the Scottish city of Glasgow for the United Nations climate change conference; the 26th Conference of the Parties (COP26). During this global climate summit, world leaders are expected to talk all things climate change. Commitments have already been made to aggressively tackle global warming and the reduction of carbon emissions. Energy is therefore likely to be high on the agenda. Continue reading “Earth, Wind and Fire- Energy and the Green Agenda. The New Industrial Revolution?”
The contractual matrix of commercial construction projects commonly includes collateral warranties. Collateral warranties typically grant a contractual cause of action to third parties (such as tenants or end-users) with an interest in the project who may not otherwise have a contract in place with parties that are designing, constructing or providing professional advice on the project. For the beneficiary, a collateral warranty can therefore be invaluable.
Recently, for example, collateral warranties have proven to be extremely useful for long leaseholders and tenants in private residential developments where cladding and fire safety issues have been discovered. Where such a warranty exists, leaseholders (as the beneficiaries) have been able in some cases to rely upon collateral warranties as a means of recovering losses, or compelling the original contractors or designers to rectify those fire safety defects in circumstances where the leaseholder was not involved in the original construction of the development.
Cairn Energy’s dispute with the Indian Government has made headlines across the globe. The case serves as a useful reminder to foreign investors of the benefits of using bilateral investment treaties to obtain relief in circumstances where they have been unfairly treated by governments in foreign jurisdictions.
The origins of this dispute lie in a separate, but similar case between Vodafone and the Indian Government, arising out of Vodafone’s purchase of a majority share of a company, Hutchison Whampoa, in 2007. Hutchison owned substantial assets in India, and the Indian Government contended that Vodafone owed capital gains and withholding tax, based on India’s 1961 Income Tax Act. Vodafone disputed the Government’s interpretation of the Act. Continue reading “Cairn Energy v India: A lesson in BIT rights and enforcement”
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 the establishment and funding of a national regulator 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.
2020 will be forever synonymous with the global pandemic. The end of the year saw the approval of vaccines and with that a hope to an end, or at least the taming, of the Covid-19 pandemic. Whilst this has dominated the media in 2020, there has been momentum in the press and Parliament about the continuing problem of dangerous cladding.
A summary of the unfolding story board is below.
By Vijay Bange
The New Year has been ushered in by an alarming surge in hospitalisations and sadly a dramatic increase in deaths from the ongoing pandemic. The Government was under increasing pressures to take action. Consequently, the Prime Minister has on 3 January announced another national lockdown, with measures which became law on Wednesday 6th January 2021.
In June 2020 I wrote an article entitled “Climate change- a wind of change for construction?”. In summary this raised the point whether increasing focus on climate change in relation to major infrastructure projects might run counter to economic efforts to counteract the effects of the global pandemic. Whilst I am writing this from a UK perspective, I dare say the issues are equally relevant to other jurisdictions.
The issue of pollution in major cities in the UK has again been highlighted by the tragic death of a child whose family lived near the south circular in Lewisham. In a landmark case, the second coroner’s inquest found that the levels of pollution were above world safe levels, and that air pollution was a material cause of her death. This tragic case will bring to the fore the national debate on pollution and climate change. Continue reading “Climate change and Construction-revisited”
- Constructive trust and / or Quistclose trust.
Deluxe property Holdings Ltd (a company registered under the laws of the British Virgin Islands) v (1) SCL Construction Limited & (2) HMRC  EWHC 2865 (TCC)
Cash flow is the lifeblood of the construction industry. This phrase, coined by Lord Denning MR, and cited relentlessly in the construction industry still holds true. In times of recession, following the cash and preserving the funds that are in dispute is crucial. There is no point in spending time and money pursuing a dispute to fight over a pot of cash that is at real risk of being dissipated. Continue reading “Follow The Money”