Doosan Enpure Ltd v Interserve Construction Ltd [2019] EWHC 2497 (TCC), 25 September 2019

This was an application for summary judgment made by the claimant. The matter arose from a Joint Venture Agreement (JVA) between the claimant and the defendant, entered into for the purpose of carrying out upgrade works at a water treatment work for Northumbrian Water Limited (NWL). Payments would be made by NWL into the JV account and then distributed based on the parties’ costs. Since November 2018, no payment had been made to either the claimant or the defendant from the JV account. The claimant thus issued these proceedings, claiming £5,312,359.71 against the defendant on the basis that it had prevented payments being made. Particularly relevant here was clause 8.6 of the JVA: “The parties shall receive interim payments from the JV in reimbursement of the Works Part Costs incurred by each party as shown on the parties’ Interim Cost Statements. Works Part Costs shall be reimbursed in accordance with the principles set out in schedule 4.” Both parties had summited Interim Cost Statements, the parties then produced and agreed an Allocation Spreadsheet which identified what was due to each of them. It was the claimant’s case that, in accordance with the first sentence of clause 8.6, it was the amount in each party’s Interim Cost Statement that was then paid to the relevant JV partner. The defendant’s case was that the operative words of clause 8.6 were to be found in the second sentence and that the claimant was only entitled to be reimbursed in accordance with the principles in schedule 4 which mean that the reimbursement of cost is made ‘net of internal changes, delay damages and other adjustments.’ Jefford J ultimately agreed with the claimant’s construction of clause 8.6. The most obvious meaning of the natural words of the clause meant that the first sentence contained the operative words. The Judge granted a declaration that the claimant was entitled to the release of the sum of £5,312,359.71 from the JV Account.