July 24, 2017

Fit for purpose – Awaiting the last word on Robin Rigg

The UK Supreme Court has heard oral argument in a case that has drawn in major renewable energy players, and raised question marks over the contractual consequences of the interplay between industry standards and fitness for purpose obligations.

The Robin Rigg case1 has caught the attention of energy companies, contractors and insurers, as the decision may have consequences not just for construction projects underway, but also for those that have already been built.

The contract to design, construct and install 60 wind turbine foundations at the Robin Rigg Offshore Wind Farm required the contractor, MT Højgaard, to comply with the J101 design standard, which contemplated a 20 year design life, but with no guarantee.  Despite this, E.ON argued that the combined effect of certain other provisions in the technical specification meant that the contractor had effectively guaranteed absolutely that the foundations would have a 20 year service life, and would be in breach of contract if they did not.

We will be reporting in detail on the Supreme Court's written decision and the implications as soon as it becomes available.  In the meantime, acknowledging the frequently voluminous technical specifications appended to offshore construction contracts and ITTs, the best advice is to ensure that the question of fitness for purpose, and the limits of any assumptions of responsibility, are spelled out clearly and in a part of the document that takes priority over the subordinate technical sections.

In the meantime, should you wish to discuss any of the issues raised in this case, please do not hesitate to contact the authors of this article.

1 MT Højgaard A/S (Respondent) v E.On Climate & Renewables UK Robin Rigg East Limited and another (Appellants) UKSC 2015/0115