Comsite Projects Limited v Andritz AG
Case reference:
[2003] EWHC 958 (TCC)
Sunday, 13 April 2003
Key terms: Part 8 - Declaration - Definition of "Construction Operations" - Waste Water Treatment Works - Sewage Sludge Recycling Centre - Jurisdiction Clause - Austrian Law - Article 23 of EC Counsel Regulation No.: 44/2001 - Section 104 - Section 105(2)(c)(1)
The Claimant, Comsite, entered into a sub-contract with the Defendant AAG. Comsite was seeking a declaration that their work under the sub-contract fell within the definition of "construction operations" pursuant to section 105(2)(c)(i). AAG applied for the claim to be dismissed on the grounds that the Court had no jurisdiction to hear the claim.
The project comprised the construction of the new waste water treatment works and sewage sludge recycling centre at Sandown on the Isle of Wight. There were two sub-contracts between the Claimant and the Defendant. The first related to the installation of an electrical system to the dryer plant itself. The second related the supply of building services. Clause 20 of the contracts stated that Austrian law applied and that disputes would be dealt with in that jurisdiction.
AAG began proceeding in the Provincial Civil Court in Graz in Austria, and contended that all claims should be heard by the Austrian Court. They relied upon Article 23 of EC Council Regulation No. 44/2001. That Article stated that if the parties were domiciled in a member state and had agreed that the Courts of the member state had jurisdiction to settle any disputes then that court would have jurisdiction. On the other hand Comsite sought a declaration that their work fell within the definition of "construction operations" referred to in section 105 of the Act so that they could refer the matter to adjudication.
HHJ Kirkham considered that the word "settle" in Article 23 referred to the final resolution of a dispute. She held that the decision of an Adjudicator was not the final resolution of a dispute, and so neither was the enforcement of a decision of any Adjudicator by the English Court. She therefore concluded that the Court had jurisdiction to determine a Part 8 Claim. In respect of Comsite's Part 8 Claim, she concluded that the Comsite services under the Building Services Sub-contract were integral to the building, but not integral to the plant. HHJ Kirkham followed the reasoning of Lord MacFadgen in Homer Burgess Limited v Chirex (Annan) Limited [2000] BLR 124 in which he held that the pipe work linking the equipment used for the processing of pharmaceuticals was part of the plant. She distinguished this case on the basis that the dryer plant would be able to function without the services.
In conclusion, HHJ Kirkham held that the building services sub-contract failed the definition of "construction operations" in section 105, and was therefore a construction contract within the meaning of section 104 of the Act.
The project comprised the construction of the new waste water treatment works and sewage sludge recycling centre at Sandown on the Isle of Wight. There were two sub-contracts between the Claimant and the Defendant. The first related to the installation of an electrical system to the dryer plant itself. The second related the supply of building services. Clause 20 of the contracts stated that Austrian law applied and that disputes would be dealt with in that jurisdiction.
AAG began proceeding in the Provincial Civil Court in Graz in Austria, and contended that all claims should be heard by the Austrian Court. They relied upon Article 23 of EC Council Regulation No. 44/2001. That Article stated that if the parties were domiciled in a member state and had agreed that the Courts of the member state had jurisdiction to settle any disputes then that court would have jurisdiction. On the other hand Comsite sought a declaration that their work fell within the definition of "construction operations" referred to in section 105 of the Act so that they could refer the matter to adjudication.
HHJ Kirkham considered that the word "settle" in Article 23 referred to the final resolution of a dispute. She held that the decision of an Adjudicator was not the final resolution of a dispute, and so neither was the enforcement of a decision of any Adjudicator by the English Court. She therefore concluded that the Court had jurisdiction to determine a Part 8 Claim. In respect of Comsite's Part 8 Claim, she concluded that the Comsite services under the Building Services Sub-contract were integral to the building, but not integral to the plant. HHJ Kirkham followed the reasoning of Lord MacFadgen in Homer Burgess Limited v Chirex (Annan) Limited [2000] BLR 124 in which he held that the pipe work linking the equipment used for the processing of pharmaceuticals was part of the plant. She distinguished this case on the basis that the dryer plant would be able to function without the services.
In conclusion, HHJ Kirkham held that the building services sub-contract failed the definition of "construction operations" in section 105, and was therefore a construction contract within the meaning of section 104 of the Act.