ABB Power v Norwest Holst Engineering Ltd [2000] EWHC Technology 68

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

Section 105(2) of HGCRA construed quite broadly using a purposive approach to decide if any given contract constitutes an exempted construction operation. In this case, a contract to install insulation to clad pipework etc on a site where the primary activity was power generation was outside the scope of the Act.

HHJ Humphrey LLoyd QC, Technology and Construction Court

1 August 2000

ABB placed an order with N to install insulation to clad pipework, drums and various other parts of the equipment at a site where ABB was building three new heat recovery steam generators (HRSGs) as part of a project to extend an existing power station. N was also to pre-fabricate the cladding material. There was a dispute about payment and N gave notice of adjudication under Part II of the Housing Grants, Construction and Regeneration Act 1996.

The question arose as to whether the work was outside the scope of the Act so that there was no right to require any dispute arising to be referred to adjudication. ABB sought to rely on section 105(2)(c) of the 1996 Act which states that:

"The following operations are not construction operations within the meaning of this Part - ... assembly, installation or demolition of plant or machinery, or erection or demolition of steelwork for the purposes of supporting or providing access to plant or machinery, on a site where the primary activity is ... power generation" .

The Court looked at the purpose of the section of the Act which was to exempt all construction operations necessary to achieve the purposes set out in paras (a) - (d) of s.105(2). It considered that the provision of insulation was an integral part of the construction of the pipework, boilers and the like which were required so that power could be generated. This part of s.105(2)(c) was therefore satisfied.

The Court held further that a site where new generators were being constructed constituted a site where the primary activity was power generation for the purposes of the section.

Section 105(2) of HGCRA 1996 is to be construed quite broadly, using a purposive approach, to decide if any given contract constitutes an exempted construction operation. In this case, a contract to install insulation to clad pipework etc on a site where the primary activity was power generation was outside the scope of the Act.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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