Involved in a dispute? You need to act..

Posted: 4th December 2015

It is sadly true that not every building project runs smoothly but, if the worst happens, it is no good sitting on your hands and hoping that the problem will go away. In one case, a construction company which refused to engage in High Court proceedings, putting forward no defence, was declared liable for more than £9.5 million.

CraneCompany A had been engaged by company B to construct a development of 500 homes and retail units in Gibraltar. The project had been blighted by dispute and company A had in the end been replaced by another contractor which completed the work. The dispute had been the subject of a number of adjudications and company A ultimately entered voluntary insolvency in Spain.

Company B launched breach of contract proceedings in England and company A’s arguments that the English courts had no power to hear the matter failed. Company A, however, continued to assert exclusive Spanish jurisdiction and refused to take any further part in the case. Its administrators had declined to accept service of documents in Spain.

In those circumstances, company A did not have the benefit of legal representation and could put in no evidence. Having heard from only one side in the case, the Court accepted the bulk of company B’s figures and declared company A liable to pay £9,582,877. The decision opened the way for company B to prove that debt in the ongoing Spanish insolvency proceedings.