Alstom Ltd v Yokogawa Australia Pty Ltd (No 7)

The case of Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) involved a dispute between a power station owner and a head contractor over the refurbishment and automation of a power station. The case was heard in the Supreme Court of New South Wales. The primary issues the court had to decide included the nature of the head contract, whether it was a turnkey or performance-based contract, and the interpretation of various clauses within the subcontract between the head contractor and the Electrical Control and Instrumentation subcontractor. The court also examined the validity of certain contractual obligations and the enforceability of liquidated damages provisions.

The court found that the head contract was indeed a turnkey contract, as it required the head contractor to deliver a fully operational Refurbished Facility according to the defined technical specifications. The subcontract, while incorporating some provisions from the head contract, did not change the nature of the contract to a performance-based one. The court scrutinised the subcontract's entire contract clause and surrounding circumstances to ascertain the parties' objective intention, concluding that the subcontract was not void for uncertainty. Regarding the liquidated damages provisions, the court held that they should reflect an accurate pre-estimate of the contractor’s loss.

Further, the court considered whether the subcontract excluded the concurrent common law duty of care and whether it completely and exclusively set out the legal rights and obligations of the parties. The court held that while the subcontract did not explicitly exclude common law duties, it did comprehensively outline the contractual obligations. The court also addressed the claim for rectification of the subcontract price, finding that the evidence did not sufficiently justify a rectification order. The court examined the adequacy of the works program and the implied terms within the subcontract, concluding that the contractor was not required to provide a regularly updated and accurate works program but was subject to implied obligations to co-operate and act in good faith.

Lastly, the court assessed the causes of delays in achieving the provisional and final acceptance stages, the admissibility of expert evidence, and the claims for extensions of time and recovery of prolongation costs. The court found that the subcontractor had not proven the causes of delays and that some claims were barred due to prior agreements to forego certain claims. The court also ruled on the legality of liquidated damages deductions and the subcontractor’s entitlement to extensions of time and additional costs.