Following the important court decision for solar EPC contracts, partner Joy Barnett discusses her recent success with the novel case.
GPP Big Field LLP & GPP Langstone LLP v Solar EPC Solutions SL  EWHC 2866
The background to the case
The dispute concerned five engineering, procurement and construction (EPC) contracts for the turnkey construction of solar power plants in the UK.
The contracts were between one or other of the claimants and Prosolia UK Ltd, the contractor which went into administration and then liquidation. The defendant was the contractor’s parent company and was sued as guarantor or indemnifier of the contractor’s obligations under four of the EPC contracts.
The claims were principally for damages for either the delayed completion of construction and/or non-completion of the construction works required under the EPC contracts, which were materially the same in most respects. The defendant counterclaimed for sums said to be due to it under the EPC contracts, including counterclaiming for damages concerning a further site.
The legal issues
The landmark case touches on two important areas of contract law - liquidated damages clauses and the difference between a guarantee and an indemnity.
The issues were:
This latter point is a new and important clarification of this point of law, as determined by the judge, HHJ Salter QC, a leading authority in this area of law.
Judgment was handed down on 7 November 2018 and the claimants were awarded a combined sum of £1,755,470, plus interest totalling £164,474 and substantial interim costs of £400,000.
The judge ruled that:
The judge clarified as a new and important point of law that the defences available to a guarantor to discharge its liability under a guarantee do not equally apply to an indemnifier, whose liability is therefore more wide-ranging and exposed, once granted.
The implications for businesses
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