Pharos Offshore Group Limited v Keynvor Morlift Limited [2025] EWHC 1764 (TCC)

This is the second in our series of articles which consider the recent TCC ruling in Pharos Offshore Group Limited v Keynvor Morlift Limited.

Our first article considered the background to the dispute and dealt with:

• the contractual status of the programme;
• the judge’s findings that Pharos was required to carry out the Works within a reasonable time;
• whether there was a contractually binding mobilisation date; and
• the lessons that can be learned from the case.

In this article, we will consider the risk which attaches to weather conditions.

Weather

A lack of contractual clarity in connection with weather risk is something which many in the offshore wind industry will be familiar with.

This can arise in a number of different guises and some which we have seen recently include:

• a failure to clearly stipulate the allocation of risk of adverse weather;
• incorporating a weather allowance which is based on inaccurate or unreliable data; and
• delays to work which cause the works to slip outside the project weather window(s), with a lack of clarity as to the impact this has on risk allocation.

The dispute between Pharos and KML is a clear example of the consequences of a contract failing to adequately deal with the allocation of weather risk. 

As explained in our previous article, the relationship between the parties was governed by the Purchase Orders and the T&Cs.

The first of the Purchase Orders was for preliminary work, relating to a CAD Storyboard and initial meetings, and so is not relevant to allocation of weather risk. However, the second of the Purchase Orders provided under the cost line items as follows:

               “Plus weather downtime at applicable rates”

It also provided that the basis of the pricing was on a particular vessel platform “during available weather windows” (although not much appeared to turn on that). In the third iteration of the Purchase Orders, “Plus weather downtime at applicable rates” was omitted (although the references to pricing basis being on the vessel platform during available weather windows was retained). Pharos maintained that this omission was entirely inadvertent, resulting from accidental overtyping. KML belatedly asserted that the consequence of the omission was that the risk of adverse weather had shifted to Pharos.

On reviewing the evidence placed before it, the Court determined that there was no evidence of any discussions or agreement between the parties that this was the case. In fact, the evidence suggested that the third version of the Purchase Orders only intended to reallocate the cost of equipment and that the wording concerning the allocation of weather risk had inadvertently been overtyped.

The judge had concluded that Pharos was only obliged to carry out the works within a reasonable time (please see our earlier article in this respect) and what was a reasonable time depended on the particular circumstances (which would include the extent to which the works could reasonably proceed on account of weather). In addition, given that the judge had concluded that “Plus weather downtime at applicable rates” continued to apply, he also found that Pharos was entitled to payment for periods of weather downtime at the applicable rates.

This is a very fact specific case, and we would not expect the same issue (i.e. the inadvertent overtyping of contractual provisions) to routinely arise. Notwithstanding that, the risk of weather is a key recurring theme in offshore projects and, with climate change, is a risk that is only going to increase in the future. Ensuring that the principle of weather risk is agreed and that the agreement is reflected in a way that works legally but also reflects real world operating conditions is imperative to the success of a project.

Weather risk is a recurring risk which is particularly acute in in offshore construction, particularly in the construction of offshore wind farms, given the length of construction periods. It is an issue which arises in a variety of ways; be that an ambiguity around who bears the weather risk, weather allowances which are based on outdated or unreliable sources or the consequences of delay to the programme meaning works are pushed outside the project weather window.

The occurrence of adverse weather is inevitable on any offshore construction project. Ensuring a contractual allocation of risk, which reflects real world operating conditions is one way of setting your project up for success. Ensuring good contract management is another. In the event that adverse weather is encountered on an offshore project, it is essential to ensure that: (a) this is accurately reflected in sufficiently detailed DPRs - with the level of details required by the contract; (b) any contractual notice requirements (both in terms of form and timing) are met; and (c) where delays have pushed the works outside of the project weather window consider obtaining early expert input, which can valuably support a claim for any additional costs or delays which are incurred as a consequence.