Comparative Approaches to Concurrent Delay

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Overview

Concurrent delay is one of the most complex (and somewhat perplexing) substantive issues in international construction law. Most of the case law and academic writing on concurrent delay originates from England, where the Malmaison Approach – named after the decision in Henry Boot Construction (UK) Ltd v. Malmaison Hotel (Manchester) Ltd – has been at the fore of relevant discussions since 1999.[2] The Malmaison Approach can be explained concisely: where there is concurrent delay, the contractor is entitled to an extension of time but is not entitled to loss or expense incurred during the extended period (i.e., the contractor receives time but not money). In other jurisdictions, the favoured approaches to dealing with concurrent delay are apportionment of the delay to completion (as in Scotland and Hong Kong) or by recognising the potential entitlement to time and money because of the ‘good faith’ obligations embedded in the respective civil codes and the importance of persons taking responsibility for any harm they are found to have caused (as in the United Arab Emirates). In certain instances, apportionment can also be the favoured approach of arbitral tribunals sitting in ‘international’ disputes, particularly those composed of civil code arbitrators.

What is concurrent delay

What constitutes concurrent delay is not as clear or settled as you might expect. There are a number of learned views as to what it means in the absence of a contractual definition. If there is a contractual definition, the precise words used by the parties to define compensable delay events and concurrent delay in the relevant contract are of primary importance. By way of example, one of the fundamental and threshold problems faced by counsel, experts and tribunals in international arbitration is working out what the terms ‘true concurrent delay’ and ‘concurrent delay’ mean, or are intended to mean, when the parties in their contract use such terms expressly.[3] For example, Global Arbitration Review asks:

If an employer would cause (e.g., by variation) a two-week critical delay to completion of the works (which itself would justify an extension of time under the construction contract) but, independently, culpable delay by the contractor (e.g., defective work) would cause the same delay, is the contractor entitled to an extension [of time]?[4]

Such a question is not straightforward. It raises various derivative questions that must be answered to properly apply the authorities: Did the employer-delayed event start or end at the same time as the contractor-delayed event? Did the employer-delayed event overlap with the contractor-delayed event? Is the entitlement to an extension of time to be decided prospectively or retrospectively? Does the fact that either event would have caused a two-week delay to completion mean that there is no dominant delay event and both are of equal effect? Does the ‘true concurrent delay’ test apply or the ‘concurrent delay’ test?

England

Concurrent delay requires critical delay. There must also be at least two causes of delay – one the responsibility of the contractor and the other the responsibility of the employer.[5] A definition of concurrent delay approved and adopted in first instance decisions and in the Court of Appeal is the following:[6]

concurrent delay is . . . a period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency.

The key wording in the definition is ‘approximately equal causative potency’,[7] which has been explained in the following terms:

where there are two competing causes of delay, they often differ in terms of their causative potency. Even where both competing causes are effective causes of delay, in the sense that each taken on its own would be regarded as the cause of the whole delay, the two may be of unequal causative potency. It is a common place to find that during the course of the factual enquiry, it becomes obvious as a matter of common sense that the two supposed causes of delay are of markedly different causative potency. One is then regarded as the effective cause and the other as ineffective. In other words, the minor cause is treated as if it were not causative at all.[8]

The above definition by John Marrin KC does not require a coincidence in time of the occurrence of the delay event as well as its effects. A similarly narrow definition – sometimes referred to as the ‘first in time approach’ – was used in Royal Brompton Hospital v. Hammond.[9] Per His Honour Judge Richard Seymour KC:

it is, I think, necessary to be clear what one means by events operating concurrently. It does not mean, in my judgment, a situation in which, work already being delayed, let it be supposed, because the contractor has had difficulty in obtaining sufficient labour, an event occurs which is a Relevant Event and which, had the contractor not been delayed, would have caused him to be delayed, but which in fact, by reason of the existing delay, made no difference. In such a situation, although there is a Relevant Event, “the completion of the Works is [not] likely to be delayed thereby beyond the Completion Date.”

The ‘relevant event’ simply has no effect on the completion date. This situation clearly needs to be distinguished from a situation in which the work is proceeding in a regular fashion, and on schedule, when two things happen, one of which is a relevant event while the other is not – and if either event had happened on its own, it would have caused delay. In these circumstances, there is a real concurrency of causes of delay.[10]

Although the definition of HHJ Richard Seymour KC has been challenged,[11] it received support in the commercial cases of Adyard Abu Dhabi v. SD Marine Services and Saga Cruises v. Fincantieri SpA.[12] It is also important to note that, regardless of any criticism levied at the perceived narrowness of this (or any other) definition, parties could insert such a definition of concurrent delay into their contract and this (assuming clarity of expression) is likely to be determinative,[13] reducing the number of otherwise ostensibly compensable delay events that could be ‘struck out’ by virtue of being concurrent.[14]

The Society of Construction Law’s ‘Delay and Disruption Protocol’ advocates a definition of ‘true concurrent delay’ that is aligned with the HHJ Richard Seymour KC definition in Royal Brompton Hospital.[15] The Protocol defines ‘true concurrent delay’ as follows:

True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time. True concurrent delay will be a rare occurrence. A time when it can occur is at the commencement date (where for example, the Employer fails to give access to the site, but the Contractor has no resources mobilised to carry out any work), but it can arise at any time.[16]

In contrast, a more common use of the term ‘concurrent delay’ concerns the situation where two or more delay events arise at different times, but the effects of them are felt at the same time.

In both cases, concurrent delay does not become an issue unless both an employer risk event and a contractor risk event lead, or will lead, to delay to completion. Hence, for concurrent delay to exist, both the employer-risk event and the contractor-risk event must be an effective cause of delay to completion (not merely incidental to the delay to completion).

Keating on Construction Contracts (11th edition) stipulates that an ‘effective cause of delay’ is sufficient to establish concurrency. The relevant passage from Keating is quoted – and described as representing the ‘settled’ position - in His Honour Judge Stephen Davies’ judgment in Thomas Barnes & Sons Plc (In Administration) v. Blackburn with Darwen BC:

In respect of claims under the contract:

  1. depending upon the precise wording of the contract a contractor is probably entitled to an extension of time if the event relied upon was an effective cause of delay even if there was another concurrent cause of the same delay in respect of which the contractor was contractually responsible; and
  2. depending upon the precise wording of the contract a contractor is only entitled to recover loss and expense where it satisfies the “but for” test. Thus, even if the event relied upon was the dominant cause of the loss, the contractor will fail if there was another cause of that loss for which the contractor was contractually responsible.[17]

Notwithstanding the assertion in Thomas Barnes & Sons, it is evident that there is a degree of uncertainty about how concurrent delay is to be defined in the context of extension of time claims under English law. The working hypothesis among commentators and practitioners alike is that for there to be concurrency, there must be a simultaneous critical effect caused by an employer-risk event and a contractor-risk event; in other words, ‘a period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency’.[18] The Court of Appeal of England and Wales (EWCA)acknowledged the differences of view on the precise ambit of concurrent delay in North Midland Building Ltd v. Cyden Homes Ltd,[19] though no resolution was provided as that was unnecessary on the facts of the case before the Court. It is to be hoped that an appropriate case reaches the EWCA before long.

Scotland

In City Inn Limited v. Shepherd Construction Limited,[20] in the Outer House, Lord Drummond Young declined to follow the concurrency of delay events approach endorsed by HHJ Richard Seymour KC, commenting as follows:

Dyson J.’s opinion in Henry Boot Construction (UK) Ltd v. Malmaison Hotel (Manchester) Ltd was considered by Judge Richard Seymour QC in Royal Brompton Hospital NHS Trust v. Hammond (No 7), (2001) 76 Con LR 148, at paragraph 31. In that passage Judge Seymour gave a further explanation of what is meant by ‘events operating concurrently’. He drew a distinction between on one hand a case where work has been delayed through a shortage of labour and a relevant event then occurs and on the other hand a case where works are proceeding regularly when both a relevant event and a shortage of labour occur, more or less simultaneously. Judge Seymour considered that Dyson J. had only been concerned with the latter situation, and not with the former; in the former situation the relevant event had no effect upon the completion date. I have some difficulty with this distinction. It seems to turn upon the question whether the shortage of labour and the relevant event occurred simultaneously; or at least it assumes that the shortage of labour did not significantly predate the relevant event. That, however, seems to me to be an arbitrary criterion. It should not matter whether the shortage of labour developed, for example, two days before or two days after the start of a substantial period of inclement weather; in either case the two matters operate concurrently to delay completion of the works. In my opinion both of these cases should be treated as involving concurrent causes, and they should be dealt with in the way indicated in clause 25.3.1 by granting such extension as the architect considers fair and reasonable.[21]

In the Inner House judgment of City Inn,[22] Lord Osborne reinforced the point that concurrent delay requires only the effects of the delay events to be concurrent:

I have difficulty in understanding the basis on which Judge Seymour drew the distinction which he did. In any event, his observations seem to involve the contemplation of a situation in which two events productive of delay, one a relevant event and the other not, occur simultaneously with chronologically coincident starting points, as the only one in which the effect of the relevant event can be assessed under clause 25, where a non-relevant event is also present. I consider that approach to its interpretation unnecessarily restrictive and one which would militate against the achievement of its obvious purpose of enabling the architect, or other tribunal, to make a judgment on the basis of fairness and a common-sense view of causation.

United States

Concurrency in the occurrence of the delay events is not a prerequisite for concurrent delay. The Court of Federal Claims evaluated the issue of concurrent delay noting that ‘[t]hornier issues are posed by concurrent or sequential delays’ than by single delays operating alone.[23] ‘Concurrent’ is generally defined as ‘operating or occurring at the same time’.[24] When used in the context of construction delay, the term can refer to both delays occurring at the same time as well as delays that occur at different times provided there is a common effect on the critical path and a delay to completion. A third category is ‘offsetting delays’ that may not occur simultaneously or even affect the same activities, but may interact over the project as a whole to affect the completion date.[25] The Court of Federal Claims in George Sollitt Construction Co v. United States developed the following definition of concurrent delays:

The exact definition of concurrent delay is not readily apparent from its use in contract law, although it is a term which has both temporal and causation aspects. Concurrent delays affect the same ‘delay period.’ A concurrent delay is also independently sufficient to cause the delay days attributed to that source of delay.[26]

Summary

Unless the parties have expressly defined otherwise, concurrent delay is likely to mean delay to completion of the work caused by two delay events, one of which is the responsibility of the owner and the other the responsibility of the contractor, and neither is the dominant cause of the delay to completion. The delay events (effective causes of delay) do not need to take place at the same time but the effect of each delay event must affect the critical path and cause delay to completion at the same time. ‘True concurrent delay’ is extremely rare as it requires the employer-delay event and the contractor-delay event to (1) occur at the same time and (2) cause delay to completion of the work at the same time. The precise terms of the express definition used by the parties in the contract will determine whether ‘true concurrent delay’ or ‘concurrent delay’ is relevant.

Comparative approaches to concurrent delay

If there is concurrent delay, then the question becomes how to allocate responsibility for the consequences (e.g., whether there ought to be an extension of time or award of costs for the relevant period). The headline position is that where there is concurrent delay, jurisdictions tend either to (1) provide the contractor with an extension of time for the entire period of concurrent delay but no time-related costs, or (2) apportion responsibility for the delay based on a culpability assessment, such that the contractor receives an extension of time and time-related costs for a portion of the period of concurrent delay and the employer obtains liquidated damages for the rest of the period, or (3) take a hybrid approach, effectively a mixture of points (1) and (2).

England

The Malmaison Approach has received widespread attention and judicial and academic support. In Henry Boot,[27] the then Mr Justice Dyson, based on the terms of the agreement between the parties, summarised the approach as follows:

It is agreed that if there are two concurrent causes of delay, one of which is a relevant event and the other is not, then the contractor is entitled to an extension of time for the period of delay caused by the relevant event notwithstanding the concurrent effect of the other event. Thus, to take a simple example, if no work is possible on a site for a week not only because of exception- ally inclement weather (a relevant event), but also because the contractor has a shortage of labour (not a relevant event), and if the failure to work during that week is likely to delay the works beyond the completion date by one week, then if he considers it fair and reasonable to do so, the architect is required to grant an extension of time of one week. He cannot refuse to do so on the grounds that the delay would have occurred in any event by reason of the shortage of labour.

Put simply, if an employer-delayed event and a contractor-delayed event both cause delay to completion, the Malmaison Approach stipulates that the contractor is entitled to an extension of time but not additional money in respect of the extended period.[28] As Mr Justice Edwards-Stuart explained in De Beers UK Ltd (formerly Diamond Trading Co Ltd) v. Atos Origin IT Services UK Ltd:

The general rule in construction and engineering cases is that where there is concurrent delay to completion caused by matters for which both employer and contractor are responsible, the contractor is entitled to an extension of time but he cannot recover in respect of the loss caused by the delay. In the case of the former, this is because the rule where delay is caused by the employer is that not only must the contractor complete within a reasonable time but also the contractor must have a reasonable time within which to complete. It therefore does not matter if the contractor would have been unable to complete by the contractual completion date if there had been no breaches of contract by the employer (or other events which entitled the contractor to an extension of time), because he is entitled to have the time within which to complete which the contract allows or which the employer’s conduct has made reasonably necessary.[29]

The Malmaison Approach was adopted by HHJ Stephen Davies in Steria v. Sigma,[30] and it has been endorsed in the first instance decisions of Motherwell Bridge Construction Ltd (t/a Motherwell Storage Tanks) v. Micafil Vakuumtechnik,[31] Royal Brompton Hospital,[32] Adyard,[33] De Beers,[34] Walter Lilly v. Mackay[35] and, most recently, in Thomas Barnes & Sons (another decision by HHJ Stephen Davies).[36]

In the Walter Lilly decision, Mr Justice Akenhead explained the logic (in part) behind the Malmaison Approach:

I am clearly of the view that, where there is an extension of time clause such as that agreed upon in this case and where delay is caused by two or more effective causes, one of which entitles the Contractor to an extension of time as being a Relevant Event, the Contractor is entitled to a full extension of time. Part of the logic of this is that many of the Relevant Events would otherwise amount to acts of prevention and that it would be wrong in principle to construe Clause 25 on the basis that the Contractor should be denied a full extension of time in those circumstances. More importantly however, there is a straight contractual interpretation of Clause 25 which points very strongly in favour of the view that, provided the Relevant Events can be shown to have delayed the Works, the Contractor is entitled to an extension of time for the whole period of delay caused by the Relevant Events in question.[37]

It is said that the Malmaison Approach requires a relaxation of the ‘but for’ test of causation because, in the case of concurrent delay, the contractor is never in the position to show that he or she would have completed on time ‘but for’ the employer-delayed event relied on. There is said to be a ‘robust justification for such a relaxation’,[38] namely that the relaxation is needed to avoid a result that is contrary to what the parties intended, the Malmaison Approach effectively assuming the parties must have intended not to conflict with the prevention principle, which, in short, provides that an employer cannot require compliance with an obligation in circumstances where the employer prevented compliance.[39]

HHJ Stephen Davies - the judge who adopted the Malmaison Approach in Steria,[40] has endorsed the Malmaison Approach as ‘settled’ in Thomas Barnes & Sons.[41] His judgment notes, citing Keating on Construction Contracts:

Although there has been much debate as to the law in this respect, in closing submissions, counsel were agreed that, following the approach at first instance of (a) Edwards-Stuart J in De Beers v Atos Origin IT Services UK Ltd [2011] BLR 274 at [177]; (b) Hamblen J in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 Comm at [277]; and (c) Akenhead J in Walter Lilly at [370], the law is settled and is accurately summarised by the editors of Keating on Construction Contracts 11th edition (“Keating”) at 9-105 as follows:

In respect of claims under the contract:

Although HHJ Stephen Davies has described the position as ‘settled’ based on counsel’s submissions in Thomas Barnes & Sons, there are live questions outstanding and on which Court of Appeal authority would be useful. Indeed, as the Right Honourable Lord Justice Coulson recognised in North Midland, the allocation of responsibility for concurrent delay is somewhat moot: ‘a contractor’s entitlement to an extension of time in circumstances of concurrent delay is not entirely free from doubt’.[42] Specific questions include whether the prevention principle is engaged in instances of concurrent delay. This has been questioned, including on the basis that if the contractor is already in culpable critical delay, then the act of prevention by the employer cannot have made it ‘impossible or impractical’ for the contractor to meet the stipulated time for completion, hence there is no prevention because the employer has not actually delayed the contractor.[43] Cases will turn on this point.

This question of whether the prevention principle is engaged is a particularly important one because if there is a move away from the Malmaison Approach, it might be that the apportionment approach will in time be used in England to relax the ‘but for’ test (i.e., in assessing and apportioning the responsibility for the delay to completion of the work on the basis of the respective fault of the parties), recognising that this is likely to require expert evidence. However, one of the main criticisms of apportionment being implemented as a matter of English law is that it would conflict with the prevention principle.[44] John Marrin KC, citing other learned authors,[45] has explained:

A second and related difficulty with the apportionment approach concerns the prevention principle. It is implicit in a finding of concurrent delay that two or more causes have given rise to delay during the same period. If one of those causes is an act of prevention on the part of the employer, the extension of time machinery will not be effective to avoid the application of the prevention principle unless the contractor is granted an extension of time for the whole period.

However, if the delay during the period is apportioned between the parties, perhaps on a 50:50 basis, the contractor will not receive a full extension of time and the prevention principle will come into play.

It is for this reason that several commentators have suggested that the apportionment approach should be rejected.

Coulson LJ in North Midland questioned the relevance of the prevention principle, noting that the ‘prevention principle has no obvious connection with the separate issues that may arise from concurrent delay’.[46] Coulson LJ stated, with reference to Keating on Construction Contracts (tenth edition):

Under the JCT standard forms (i.e., without the bespoke amendments added here), a contractor’s entitlement to an extension of time in circumstances of concurrent delay is not entirely free from doubt. There is no Court of Appeal authority on the issue. In Walter Lilly and Co Limited v. Giles Mackay and Another [2012] EWHC 1773 (TCC);[2012] 28 Const. L.J. Issue 8, page 622, Akenhead J said that a contractor was entitled to an extension of time for concurrent delay. In reaching that conclusion he referred to a number of first-instance decisions, including Henry Boot Construction (UK) Limited v. Malmaison Hotel (Manchester) Limited [1999] 70 Con LR 32 (where the point was conceded) and the Scottish case of City Inn Limited v. Shepherd Construction Limited [2010] BLR 473 (where a different approach was adopted). Keating on Construction Contracts, 10th Ed., paragraph 8-014 takes the opposite view. It states:

“However, where there are concurrent causes of delay (one the contractor’s responsibility and the other the employer’s) the prevention principle would not be triggered because the delay would have occurred anyway absent the employer delay event.”

Two more first instance decisions are cited in support of that proposition: Adyard and Jerram Falkus Construction Limited v. Fenice Investments Incorporated (No. 4) [2011] EWHC 1935 (TCC). In Adyard, Hamblen J said, at paragraph 279, that “there is only concurrency if both events in fact cause delay to the progress of the works and the delaying effect of the two events is felt at the same time”.[47]

For reasons which will become apparent below, it is unnecessary to resolve this potential difference of opinion on this appeal. For present purposes, these authorities are relevant only of the possibility that a contractor may be entitled to an extension of time for the whole period of concurrent delay (even where the work could not have been completed any earlier than it actually was because of the contractor’s default), which has led employers to introduce the sort of bespoke amendment on which this appeal turn.

Against this background of pertinent questions, if not unsettlement, concurrency clauses are to be commended. Coulson LJ puts the position clearly and conclusively:

it seems likely that the popularity of concurrency clauses will continue to grow. On their face, they represent an attempt by the parties expressly to apportion responsibility for concurrent delay, and North Midland is authority for the proposition that such clauses do not offend against the prevention principle. There is no reason in principle why a workable concurrency clause could not be agreed which worked the other way to the one in North Midland: in other words, one which provided that, if there was concurrent delay, the contractor would be entitled to an extension of time, and loss and expense.[48]

An obvious outcome of concurrency clauses is that they might be used to allow (by agreement) an employer to benefit from concurrency. The ostensible unfairness for a contractor who recovers nothing (and instead pays liquidated damages for delay) if there is concurrent delay to completion was considered by Coulson LJ in ‘Prevention or Cure? Delay Claims and the Rise of Concurrency Clauses’, in which he states:

A period of concurrent delay, properly arose because a delay had occurred for two separate reasons, one being the responsibility of the contract or/and one the responsibility of the employer. Each could argue that it would be wrong for the other to benefit from a period of delay from which the other is equally responsible. In this case the parties had sought to reverse the Malmaison approach to say that, rather than the contractor, it would be the employer who would benefit from the concurrency difficulties. The court said that ‘either result may be regarded as harsh on the other party; neither could be said to be uncommercial or unworkable.[49]

In considering what is harsh, commercial or workable, it should be borne in mind that the Malmaison Approach is not inherently beneficial to contractors or employers. Whether there is a benefit to the contractor turns on the ratio between the cost of the delay to the contractor (i.e., the prolongation costs) and the agreed rate for liquidated damages in the event of delay. If the contract makes provision for low or minimal liquidated damages and the delay is proving comparatively expensive for the contractor in time-related costs, the contractor’s primary concern will be money and so the Malmaison Approach will be of no real assistance. Conversely, if the liquidated damages are high, the opposite is true: most beneficial to the contractor is an extension of time to ensure protection from liquidated damages, which the Malmaison Approach of ‘time but not money’ provides.

Scotland

Responsibility for concurrent delay in Scotland is apportioned based on an assessment of culpability. Apportionment was first put forward by Lord MacLean in John Doyle:

[w]e are of the opinion that apportionment of loss between the different causes is possible in an appropriate case. Such a procedure may be appropriate in a case where the causes of the loss are truly concurrent, in the sense that both operated together at the same time to produce a single consequence. For example, work on a construction project might be held up for a period owing to the late provision of information by the architect, but during that period bad weather might have prevented work for part of the time. In such a case responsibility for the loss can be apportioned between the two causes, according to their relative significance.[50]

In the City Inn case at first instance, Lord Drummond Young, referring to The Joint Contracts Tribunal Limited’s ‘Standard Building Contract, Private Edition with Quantities’ (1980 edition), said:

Where there is true concurrency between a relevant event and a contractor default, in the sense that both existed simultaneously, regardless of which started first, it may be appropriate to apportion responsibility for the delay between the two causes; obviously, however, the basis for such apportionment must be fair and reasonable. Precisely what is fair and reasonable is likely to turn on the exact circumstances of the particular case.[51]

This view was affirmed by a majority of the Inner House of the Court of Session on appeal. Hence, in Scottish law, the apportionment of delay between relevant events and the contractor’s risk events is well ingrained and represents settled law.

Hong Kong

The apportionment approach has been followed in Hong Kong where, in W Hing Construction Company Ltd v. Boost Investments Limited,[52] the judge stated:

Much case law has developed on this thorny question of concurrent delay, which turns on the wording of each particular EOT clause, as well as considerations of, e.g., what is the ‘dominant’ delay. The relevant case law has been helpfully reviewed by Lord Drummond Young in the recent Scottish case of City Inn Limited v. Shepherd Construction Limited [2007] Scottish Court of Sessions CSOH 190 (30 November 2007) at paragraphs 10–21, in which he reached the following principal conclusions, with which I respectfully agree –

  1. the Architect ought not to assess delay using a ‘coldly logical approach’, but instead should use a ‘practical common sense approach’, bearing in mind that the over-riding objective under the EOT clause is to grant a ‘fair and reasonable’ EOT.
  2. the fact that the contractor is already in delay himself is not, in itself, a sound reason not to grant an EOT; what is fair and reasonable is a question of fact to be determined according to the judgment or discretion of the Architect on the particular facts of each case.
  3. where there is true concurrency in delaying events it may, in some cases, be appropriate to apportion responsibility for the delays between the two parties so as to arrive at a fair and reasonable assessment.

Singapore

The Singapore courts have briefly considered concurrent delay.[53] The Court of Appeal, in PPG Industries (Singapore) Pte Ltd v. Compact Metal Industries Ltd,[54] followed the apportionment approach. The Court considered that ‘the sole issue that arises here is that of causation’ and, following the ‘but-for’ test, stated:

[t]hus, the crucial question is whether the 273 days’ worth of additional site preliminaries (or part thereof) would not have been incurred by the plaintiff but for the defendant’s breach of contract. To recast this question: Whether the 273 days of delay in the completion of the project (or part thereof) were caused by the defendant’s breach of contract, or by some other delaying event.[55]

Of tangential relevance, the Court considered two specific delaying events (‘no noisy work/stop orders’ and ‘exceptionally adverse weather conditions’) for which, respectively, 78 days and nine days of extensions of time were granted. The Court found:

Both delaying events were not attributable to the defendant’s fault, but in all likelihood did contribute to the ultimate delay in the completion of the project. If work at the project site was ordered to stop or weather conditions were so adverse that works could not proceed, it stands to reason and common sense that these two delaying events would have consequently caused some measure of delay in the completion of the project, and it must follow that the defendant should not have been held liable for the delay in the completion of the project which was caused by these two delaying events.

For the reasons set out above, we are of the view that the defendant should not be held liable for the entire 273 days’ worth of [delay].[56]

Delay and Disruption Protocol

The Society of Construction Law’s ‘Delay and Disruption Protocol (currently in its second edition) provides that where concurrent delay has been established, the contractor should be entitled to an extension of time for the employer-related delay to completion, dealt with in accordance with Core Principle 5. The contractor-related delay should not reduce the extension of time entitlement due to the contractor because of the employer-related delay. As discussed above, the Protocol’s position on concurrent delay is influenced by the English law prevention principle, by virtue of which an employer cannot take advantage of the non-fulfilment of a condition (e.g., to complete work by a certain date), the performance of which the employer has hindered. The Protocol’s approach to the treatment of concurrent delay (once established) prevents arguments about whether an employer-related delay occurring concurrently with a contractor-related delay actually hinders the contractor’s progress in any way.

When an employer-related delay to completion and a contractor-related delay to completion are concurrent, the contractor may not recover compensation in respect of the employer-risk event unless it can separate the loss or expense that flows from the employer-risk event from that which flows from the contractor-risk event. If it would have incurred the additional costs in any event because of concurrent contractor-related delay, the contractor will not be entitled to recover those additional costs. In most cases, this will mean that the contractor will be entitled to compensation only for any period by which the employer-related delay exceeds the duration of the contractor-related delay.

United Arab Emirates

If the contract is silent or ambiguous on the issue of concurrent delay, the position under United Arab Emirates (UAE) law is not clear, as the issue of competing causes of delay and concurrency are not expressly addressed in the UAE Civil Code. It is generally understood, however, that various principles of UAE law favour an apportionment approach, where liability for delay is apportioned between the parties in accordance with their respective degrees of fault. This approach is consistent with Articles 246, 290 and 291 of the UAE Civil Code, which emphasise ‘good faith’ and the principle that persons should take responsibility for any harm they have caused. Article 390 of the Code is also relevant because it allows a tribunal full discretion to ensure that compensation reflects the actual loss and could be argued to allow downwards adjustment of liquidated damages where there is concurrency.

France

Concurrent causation or delay is not well developed in French law. Apportionment appears to be favoured by the courts.[57] Put simply, apportionment is premised on the requirements of good faith in the performance of contracts, as set out in Article 1104 of the French Civil Code, and the principle of full compensation, as set out in Article 1231-2 of the French Civil Code, whereby a party is compensated for the loss ‘he has suffered – or for the gain of which he has been deprived’.[58]

Switzerland

Swiss law is far from settled on the topic of concurrent delay. The Swiss general damages regime – which provides for apportionment – also governs claims to damages and entitlement for concurrent delay. Article 44(1) of the Code of Obligations states:

Where the injured party consented to the action which caused the loss or damage, or circumstances attributable to it helped give rise to or compound the loss of damage or otherwise exacerbated the position of the party liable for it, the court may reduce the compensation due or even dispense with it entirely.[59]

Generally, where there are two (or more) independent causes of delay that at least partially overlap, and one is a contractor-related delay and one is an employer-related delay, the general rule is that the contractor is entitled to an extension of time, notwithstanding his or her own delay, but not to additional costs due to the employer’s delay (i.e., the Malmaison ‘time-not-money’ Approach).

Conclusions

Absent any express definitions of concurrent delay to completion, tribunals are likely to treat the term ‘concurrent delay’ to mean the occurrence of delay to the completion of work caused by two or more delay events, one of which is the responsibility of the employer and the other the responsibility of the contractor. Parties are free to define concurrent delay and address how concurrent delay ought to be evaluated (including apportionment if that is the agreed preferred option). Parties ought to bear in mind that the prevention principle is not an absolute rule of law and can be circumvented by express wording; tribunals will not readily ignore the allocation of risk in the construction contract.

As noted, many jurisdictions give entitlement to the contractor when there is concurrent delay to completion. Following the EWCA’s comments in North Midland,[60] the door in England and Wales is ajar if not open to the possibility of a departure from the Malmaison Approach of time but no money. A departure could (at least theoretically) include the strict enforcement of the ‘but for’ test of causation, which would mean that a contractor is not entitled to an extension of time or to additional money if there is concurrent delay, or it might mean that an apportionment approach is adopted with the outcome reflecting a culpability assessment. There is much on which to speculate, including whether it can even be said that an employer has delayed a contractor (and so engaged the prevention principle) if there is concurrent delay. It is hoped a suitable case comes before the EWCA to provide clarity on these important issues.

Given that it is entirely possible that an English court may depart from the Malmaison ‘time-not-money’ Approach, contracts are increasingly being drafted to include a provision to reflect the commercial deal in respect of concurrent delay.[61] This is sensible and to be commended, the EWCA having made clear that such clauses are enforceable and do not offend against the prevention principle.[62]


Footnotes

[1] Graham Lovett is a partner and Ryan Whelan is a senior counsel at Akin. The authors are grateful to Akin associate Freddie Akiki for his research assistance and to former colleagues Hamish Lal, Brendan Casey and Léa Defranchi for their work on a previous edition of this chapter.

[2] Henry Boot Construction (UK) Ltd v. Malmaison Hotel (Manchester) Ltd (1999) 70 Con. L.R. 32 QBD (TCC) (Henry Boot).

[3] Lord Osborne made a similar point on the issues arising from the terminology in this space in City Inn Ltd v. Shepherd Construction Ltd [2010] CSIH 68 (City Inn), at para. 49: ‘[O]ne of the problems in using such expressions as “concurrent delay” or “concurrent delaying events” is that they may refer to a number of different situations.’

[4] Global Arbitration Review, Know-How, Construction Arbitration, Question 6: Competing causes of delay.

[5] There is no concurrent delay if there is simply parallelism (i.e., the same party is responsible for more than one cause of the same delay). Likewise, there is no concurrent delay if an employer causes critical delay and the contractor elects to implement pacing without causing further delay.

[6] This is the definition as originally proposed by John Marrin KC in ‘Concurrent Delay’, 18(6) Construction Law Journal 436 (2002) – adopted in obiter as ‘a useful working definition’ by the then Hamblen J in Adyard Abu Dhabi v. SD Marine Services [2011] EWHC 848 (Comm) (Adyard), and by Coulson LJ in North Midland Building Ltd v. Cyden Homes Ltd [2018] EWCA Civ 1744 (North Midland). This definition was not revised by John Marrin KC in ‘Concurrent Delay Revisited’, Paper 179 (The Society of Construction Law (SCL), February 2013) (https://www.scl.org.uk/papers/concurrent-delay-revisited#:~:text=The%20paper%20suggests%20that%20any,and%20the%20fact%20that%20no (accessed 22 August 2023)).

[7] The approximately equal causative potency factor has been challenged by V Moran KC in ‘Causation in Construction Law: The demise of the “dominant cause” test’, Paper 190 (SCL, November 2014), at para. 90 (https://www.scl.org.uk/papers/causation-construction-law-demise-dominant-cause-test (accessed 22 August 2023)):

(ii) the very concept of concurrent effective causes of ‘approximately equal causative potency’ is difficult to understand, unhelpful and unnecessary; (iii) a new, less restrictive, approach to the test of causation in concurrent delay claims can be justified on a proper construction of the relevant provisions, is more solidly based in analogous claims for damages for breach of contract and can even be detected in recent authority – what I call the ‘effective cause’ test; (iv) an effective cause is one that operates by itself or combines with another to cause critical delay to the completion date of a project; and (v) an effective concurrent cause for these purposes is simply one that, had it operated in the absence of the delay event(s) that the contractor is responsible for, would have nevertheless caused the same period of critical delay to the Works in the circumstances that the parties would or should have found themselves in under this hypothesis.

[8] John Marrin KC, ‘Concurrent Delay’ and ‘Concurrent Delay Revisited’ (op. cit. note 6).

[9] Royal Brompton Hospital NHS Trust v. Hammond (No. 6) [2000] EWHC Technology, 39.

[10] id., at para. 31.

[11] City Inn, at para. 36; [2010] B.L.R. 473; (2008) 24 Construction Law Journal 590; [2010] CILL 2889: ‘unnecessarily restrictive and one which would militate against the achievement of its obvious purpose of enabling the architect, or other tribunal, to make a judgment on the basis of fairness and a common-sense view of causation’.

[12] Adyard; Saga Cruises BDF Limited v. Fincantieri SpA [2016] EWHC 1875 (Comm).

[13] North Midland, per Coulson LJ, at paras. 22–24.

[14] David Barry, ‘Concurrent Delay in Construction Law’, (2011) Construction Law Journal concludes ‘H.H. Judge Seymour QC’s definition of concurrent delay in Royal Brompton Hospital is so narrow as to be of little effect’.

[15] The Society of Construction Law, ‘Delay and Disruption Protocol’ (2nd edition, February 2017).

[16] See paras. 10.3, 10.4 and 10.5. The Protocol’s position on true concurrent delay is not explained, which is odd given the comments of the Outer and Inner Houses in City Inn and the approval of John Marrin KC’s definition by the then Hamblen J in Adyard.

[17] Thomas Barnes & Sons Plc (In Administration) v. Blackburn with Darwen BC [2022] EWHC 2598 (TCC), at para. 118 (Thomas Barnes & Sons).

[18] Adyard, at para. 277: ‘A useful working definition of concurrent delay in this context is “a period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency” – see the article Concurrent Delay by John Marrin QC (2002) 18 Const LJ No. 6 436.’

[19] [2018] EWCA Civ 1744 per Coulson LJ, at para. 50.

[20] [2007] CSOH 190 (Outer House, Court of Session), at para. 16; [2008] B.L.R. 269; (2008) 24 Construction Law Journal 590; [2008] CILL 2537.

[21] David Barry, in ‘Concurrent Delay in Construction Law’, (2011) Construction Law Journal, concludes:

While it may be argued that H.H. Judge Seymour QC’s definition of concurrent delay in Royal Brompton Hospital is so narrow as to be of little effect, Lord Drummond Young’s definition may be said to have achieved the opposite extreme since it effectively ensures that almost all delaying events encountered on a project will be considered as being a contributory cause of delay to the Completion Date. Moreover, it is submitted that Lord Drummond Young’s construction of the subject (and typical) EOT contract clause, by which he concluded that, when seeking to determine the existence of concurrent delay, the dates upon which the competing delay events arose ‘should not matter’, is incorrect. The subject contract clause in fact makes these dates an important factor in the EOT assessment.

[22] City Inn, at para. 36; [2010] B.L.R. 473; (2008) 24 Construction Law Journal 590; [2010] CILL 2889.

[23] R.P. Wallace, Inc. v. U.S., 63 Fed. Cl. 402, 410–11 (2004).

[24] Webster’s Ninth New Collegiate Dictionary, at 273 (1987); see also David W James, ‘Concurrency & Apportioning Liability & Damages in Public Contract Adjudications’, 20 Public Contract Law Journal 490, 491 (1991) (defining concurrent delay).

[25] See PCL Const. Services, Inc v. U.S., 53 Fed. Cl. 479, 486 (2002).This case provides a detailed discussion of sequential as opposed to simultaneous or concurrent delay.

[26] George Sollitt Const Co v. U.S., 64 Fed. Cl. 229, 239 (2005) (citations omitted); see Essex Electro Engineers, Inc v. Danzig, 224 F.3d 1283, 1295–96 (Fed. Cir. 2000) (distinguishing concurrent delays from sequential delays).

[27] Henry Boot, at para. 13. See also Hudson’s Building and Engineering Contracts (Twelfth Edition), at para. 6-060, which states that the Malmaison Approach is ‘likely in the Editor’s view to reflect the law of England and Wales’.

[28] A similar approach is followed in Australia, where a common-sense approach is advocated and where it is assumed that the purpose of an extension of time clause is to relieve the contractor from the obligation to pay liquidated damages for delay to completion for periods of delay where the employer is responsible. Put another way, the prevention principle plays a major part in the legal analysis.

[29] De Beers UK Ltd (formerly Diamond Trading Co Ltd) v. Atos Origin IT Services UK Ltd [2010] EWHC 3276 (TCC) (De Beers).

[30] Steria Ltd v. Sigma Wireless Communications Ltd [2008] B.L.R. 79 (TCC), 118 Con. L.R. 177, [2008] CILL 2544 (Steria v. Sigma), at para. 131:

It appears from the relevant part [§13] of the judgment in Henry Boot Construction v. Malmaison Hotel Manchester that Dyson J. (as he then was) was recording an agreement by counsel to the effect stated above, rather than deciding a point which was at issue between the parties. Nonetheless the fact that he, as a judge with such wide experience in the field, noted the agreement without adverse comment is a strong indication that he considered that it correctly stated the position.
Furthermore, the rationale suggested by the editors of Keating appears to me, with respect, to be compelling, and to apply as much to this case as it does to the particular clause in the Henry Boot case and indeed to extension of time clauses
generally.
Accordingly, I propose to adopt that approach as correctly representing the proper approach to extensions of time under clause 6.1 of the sub
-contract.

[31] Motherwell Bridge Construction Ltd (t/a Motherwell Storage Tanks) v. Micafil Vakuumtechnik, 81 Con LR 44.

[32] Royal Brompton Hospital NHS Trust v. Hammond (No. 7) [2001] EWCA Civ 206, 76 Con. L.R. 148.

[33] Adyard; Saga Cruises BDF Limited v. Fincantieri SpA [2016] EWHC 1875 (Comm)

[34] De Beers [2010] EWHC 3276 (TCC), [2011] B.L.R. 274, 134 Con. L.R. 151, in which Edwards-Stuart J explained: ‘The general rule in construction and engineering cases is that where there is concurrent delay to completion caused by matters for which both employer and contractor are responsible, the contractor is entitled to an extension of time but he cannot recover in respect of the loss caused by the delay.’

[35] Walter Lilly & Co Ltd v. Mackay [2012] EWHC 1773 (TCC); [2012] B.L.R. 503 (Walter Lilly).

[36] Thomas Barnes & Sons, at para. 118.

[37] Walter Lilly, at para. 370.

[38] John Marrin KC, ‘Concurrent Delay Revisited’ (op. cit. note 6), at p. 16.

[39] This is widely understood to mean that an employer cannot hold the contractor to a specified completion date if the employer has prevented the contractor from achieving that date, in which case ‘time becomes at large and the obligation to complete by the specified date is replaced by an implied obligation to complete within a reasonable time’: Multiplex Constructions (UK) Ltd v. Honeywell Control Systems Ltd (No. 2) [2007] EWHC 447 (TCC); [2007] B.L.R. 195; 111 Con. L.R. 78, at [48]. Although outside the scope of the present discussion, there is now important analysis from the Right Honourable Lord Justice Coulson suggesting that application of the prevention principle does not make time at large – see ‘Prevention or Cure? Delay Claims and the Rise of Concurrency Clauses’, Paper 218 (The Society of Construction Law, June 2019) (https://www.scl.org.uk/papers/prevention-or-cure-delay-claims-rise-concurrency-clauses (accessed 22 August 2023)). In North Midland, Coulson LJ said, at [10–12]:

  1. In the 19th century, the courts concluded that it was wrong in principle for an employer to hold a contractor to a completion date, and a concomitant liability to pay liquidated damages, in circumstances where at least a part of the subsequent delay was caused by the employer. Thus, in Holme v. Guppy (1838) 3 M&W 387, the defendant failed to give possession of the site for four weeks following execution of the contract. Parke B found that there were clear authorities to the effect that ‘if the party be prevented by the refusal of the other contracting party from completing the contract within the time limited he is not liable in law for the default’.
  2. Similarly in Dodd v. Churton {1897] 1 QB 566, where the employer ordered extra work which delayed completion, Lord Esher said: ‘where one party to a contract is prevented from performing it by the act of the other, he is not liable in law for that default; and accordingly a well-recognised rule has been established in cases of this kind, beginning with Holme v Guppy, to the effect that, if the building owner has ordered extra work beyond that specified by the original contract which has necessarily increased the time requisite for finishing the work, he is thereby disentitled to claim the penalties for non-completion provided by the contract.’
  3. As a result of these decisions, construction contracts began to incorporate extension of time clauses, which provided that, on the happening of certain events (which included what might generically be described as ‘acts of prevention’ on the part of the employer), the date for completion under the contract would be extended, so that liquidated damages would only be levied for the period after the expiry of the extended completion date. Such clauses were not, as is sometimes thought, designed to provide the contractor with excuses for delay, but rather to protect employers, by retaining their right both to a fixed (albeit extended) completion date and to deduct liquidated damages for any delay beyond that extended completion date.

John Marrin KC, ‘Concurrent Delay Revisited’ (op. cit. note 6), at p. 7, makes clear that ‘for the purposes of this paper, it is assumed that the prevention principle does apply even in cases of concurrent delay’. He continues:

On that basis, it is necessary to have regard to the prevention principle in considering the correct approach. If the approach under consideration involves no departure from the prevention principle because the contractor receives a full extension of time for any act of prevention, all well and good. But if, on the approach under consideration, the contractor does not receive an extension of time (or does not receive a full extension) there is a difficulty. The extension of time machinery will have failed to insulate the contractor against the employer’s act of prevention and the prevention principle will or may be brought into play. In those circumstances, it will be necessary to consider whether the principle does come into play or whether the terms of the contract are such as to express a contrary intention.

[40] Steria v. Sigma, at para. 131:

It appears from the relevant part [§13] of the judgment in Henry Boot Construction v. Malmaison Hotel Manchester that Dyson J. (as he then was) was recording an agreement by counsel to the effect stated above, rather than deciding a point which was at issue between the parties. Nonetheless the fact that he, as a judge with such wide experience in the field, noted the agreement without adverse comment is a strong indication that he considered that it correctly stated the position.

Furthermore, the rationale suggested by the editors of Keating appears to me, with respect, to be compelling, and to apply as much to this case as it does to the particular clause in the Henry Boot case and indeed to extension of time clauses generally.

Accordingly, I propose to adopt that approach as correctly representing the proper approach to extensions of time under clause 6.1 of the sub-contract.

[41] Thomas Barnes & Sons, at para. 118.

[42] North Midland, at para. 17.

[43] In addition to North Midland, see also Adyard, at paras. 281–82 and Coulson J in Jerram Falkus Construction Ltd v. Fenice Investments Inc [2011] EWHC 1935 (TCC), at paras. 49–50.

[44] The prevention principle is also cited as a significant reason for not using the dominant cause approach. John Marrin KC, ‘Concurrent Delay Revisited’ (op. cit. note 6), states at p. 14:

The third difficulty with the dominant cause approach is that it is liable to come into conflict with the prevention principle. Taking the facts of the chosen example, let it be supposed that the architect decides to treat the contractor’s delay in carrying out remedial works as the dominant cause of delay during the month of January 2012. The assumed facts nevertheless imply that the employer’s act of prevention in instructing extra work was a concurrent cause of the entire month of delay. If the extension of time clause is implemented on the basis that contractor-default is the dominant cause of delay, it will not afford the contractor relief for delay caused by the act of prevention and the result will be that the prevention principle will come into play .Time will be set at large, unless the contract expressly provides otherwise.

[45] Paul Tobin, ‘Concurrent and Sequential Causes of Delay’, (2007) 24 ICLR 142, p. 151; Sir Vivian Ramsey, ‘Claims for Delay and Disruption: The Impact of City Inn’, a paper presented at the annual TECBAR conference in January 2011 and in the TECBAR Review for Spring 2011, who made it clear that apportionment (1) would be unworkable and unpredictable in practice, (2) if adopted, would risk triggering the prevention principle and thereby placing time at large, and (3) in common law claims for damages is not generally available (absent a right under statute). It is unclear why contractor-culpable delay should be relevant to the assessment of delay to completion. See also Hudson on Building and Engineering Contracts (Twelfth Edition), paras. 6-060 and 6-062; Walter Lilly – see also 143 Con. L.R. 79, (2012) 28 Construction Law Journal 622, [2012] CILL 3229, at para. 370.

[46] North Midland, per Coulson LJ, at para. 32.

[47] id., at paras. P17 and 18.

[48] The Rt Hon Lord Justice Coulson, ‘Prevention or Cure? Delay Claims and the Rise of Concurrency Clauses’, Pinsent Masons Lecture given in Hong Kong on 15 November 2018 and presented to The Society of Construction Law at a meeting in London on 5 February 2019, Paper 219 (op. cit. note 39), at para. 45.

[49] id., at para. 41.

[50] John Doyle Construction Ltd v. Laing Management (Scotland) Ltd [2004] B.L.R. 295, para. 16.

[51] City Inn, at para. 18; [2008] B.L.R. 269; (2008) 24 Construction Law Journal 590; [2008] CILL 2537.

[52] W Hing Construction Company Ltd v. Boost Investments Limited [2009] B.L.R. 339 High Court of Hong Kong.

[53] In Aoki Corp v. Lippoland (Singapore) Pte Ltd [1995] 2 SLR 609; [1995] SGHC 50, concurrent delay was acknowledged as being a factor that may need to be considered when assessing critical causes of delay (discussed at para. 36 in Multiplex Constructions Pty Ltd v. Sintal Enterprise Pte Ltd [2005] 2 SLR 530; [2005] SGCA 10. Here, Justice Judith Prakash considered that ‘the issue of the effect of concurrent delay (if any) ought to be determined in accordance with the parties’ agreement by an arbitrator . . . because there is a substantive dispute on concurrent delay, it cannot be said to be indisputable that the set-off notices are not reasonably accurate. This is an issue to be determined by the arbitrator’.

[54] PPG Industries (Singapore) Pte Ltd v. Compact Metal Industries Ltd [2013] SGA 23.

[55] id., at para. 4.

[56] id., at paras. 9 and 11.

[57] The prevention principle also features in French law. Article 1231-1 of the French Civil Code provides: ‘A debtor is condemned, where appropriate, to the payment of damages either on the ground of the non-performance or a delay in performance of an obligation, unless he justifies this on the ground that performance was prevented by force majeure.’ Moreover, Article 1231-4 of the French Civil Code provides: ‘In the situation where non-performance of a contract does indeed result from gross or dishonest fault, damages include only that which is the immediate and direct result of non-performance’ (emphasis added). Put simply, subject to the owner proving (1) a fault (keeping in mind that the obligation to finish the work on time is essential (obligation de résultat) and so the mere fact that there is delay proves the incorrect behaviour of the contractor), (2) a prejudice, and (3) a causal link between the two, the contractor will be liable for damages in the case of a contractual fault that causes a delay. The contractor can be exempted, however, if he or she proves the existence of an external cause (cause étrangère) (i.e., an event not attributable to the author of the damage, the occurrence of which has the effect of totally or partially breaking the causal relationship). External cause can be (1) acts by a third party, (2) acts by the principal (owner) or (3) a fortuitous event. With regard to acts by the owner, even if these do not meet the criteria of force majeure, case law tends to require a fault on the part of the owner (even though some tribunals seem to retain a ‘non-faulty act’ (fait non fautif) for the contractor to be exempted from paying damages – in proportion to his or her involvement in the contractual non-performance. External causes can meet the criteria of force majeure (i.e., unforeseeable, irresistible and external events) so that Article 1218 of the Civil Code will apply; if the event is temporary, the execution of the contract is suspended (and, consequently, the contractor gets an extension of time (unless the delay is so important that the contract must be terminated)); or if the event is definitive, the contract is terminated without other formality.

[58] Nonetheless, within the limits and exceptions provided for in Articles 1231-3 to 1231-7 of the French Civil Code. In particular, Article 1231-3 provides: ‘A debtor is bound only to damages which were either foreseen or which could have been foreseen at the time of conclusion of the contract, except where non-performance was due to a gross or dishonest fault’; and Article 1231-4 specifies that damages ‘include only that which is the immediate and direct result of non-performance’.

[59] Swiss Code of Obligations, Article 44(1).

[60] North Midland.

[61] For example, parties could follow the wording used in North Midland, discussed above, or the wording used in the Australian standard form AS2124-1992, Cl. 35.5, fifth paragraph, which states that: ‘Where more than one event causes concurrent delays and the cause of at least one of those events, but not all of them, is not a cause referred to in the preceding paragraph, then to the extent that the delays are concurrent, the Contractor shall not be entitled to an extension of time for Practical Completion.’

[62] North Midland, at paras. 29–38.

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