“only those costs of repair that would have remedied the defect immediately prior to the occurrence of the damage”. Therefore, the Court upheld the trial judge’s finding that “the exclusion does not extend to exclude the cost of rectifying or replacing the damaged property itself”. In this case, the Court found that the design of the slabs was not defective. Rather, the damage was the result of the faulty shoring procedures. Here, the preventive costs represent the costs of implementing proper shoring procedures (or proper workmanship). The Court explained that, in this case, it was coincidental that no additional costs would have been required for doing the job correctly. However, under other circumstances, the excluded preventive costs might be substantial. In any event, if the insurers intended to exclude broader damage, they could have use LEG 1/96 in the policy. UK: Lord Neuberger, in NH International (Caribbean) Ltd v National Insurance Property Development Company Ltd (Trinidad and Tobago) [2015] UKPC 37 , held that a contractor had been entitled to terminate its engagement under a contract based on the FIDIC Red Book (1999). Disagreements arose between the parties, and the contractor (NHIC) suspended work. It subsequently purported to terminate the agreement. A number of issues were then referred to arbitration. NHIC requested evidence from the employer (NIPD) under clause 2.4 of FIDIC Red Book that it had made arrangements to pay the contract price. Unsatisfied with the letters sent in response, it initially suspended works and subsequently issued a notice of termination. NIPD disputed that the contract had been validly terminated. The Arbitrator held that it had, and in doing so concluded that the evidence required under clause 2.4 must go beyond merely showing that the employer is able to pay. After this decision was reversed at the Court of Appeal, the Privy Council upheld the Arbitrator’s finding that NHIC was entitled to terminate. The second appeal related to clause 2.5, which gives the employer a right of set off. The Court of Appeal, agreeing with the Arbitrator, found that the clause prohibits the employer from setting off a sum against any amount certified, but does not prevent the employer from exercising its right of set off in another way. The Privy Council disagreed, noting that clause 2.5 makes it clear that any claim by the employer must be notified promptly and particularised, and that failure to comply with the notice requirement would invalidate the claim. The case provides useful guidance for employers on what is required to comply with these clauses.
17
Made with FlippingBook flipbook maker