Commercial suicide fears are no defence (2013) 24 9 Cons.Law 23 [Archived]
Commercial suicide fears are no defence (2013) 24 9 Cons.Law 23 [Archived]

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Commercial suicide fears are no defence (2013) 24 9 Cons.Law 23 [Archived]
  • Key points
  • Key issues in the arbitration
  • No leave to appeal arbitration award
  • Final remarks

ARCHIVED: This Practice Note has been archived and is not maintained.

This article appears as originally published in Construction Law on 1 November 2013 and is not maintained.

Ann Levin and Estelle Katsimani of Herbert Smith Freehills analyse an application to appeal an arbitration award in a case where a contractor suspended work because it feared going bust if it proceeded.

Key points

  1. Morris Homes suspended construction work for 18 months alleging that due to the financial crisis it risked ‘commercial suicide’ if it continued with the project

  2. An obligation to carry out the works ‘diligently’ relates also to the time in which such works are carried out

  3. It must be ‘clear cut’ that the criteria in ss 69(3)(c) and 69(3)(d) of the Arbitration Act 1996 are satisfied for leave to be granted

  4. A question of law may not be considered ‘one of general public importance’ under s 69(3)(c)(ii) even if the relevant contractual provisions are commonly used, if the events to which they are applied are one-off events

  5. In Morris Homes specific events which required the works to be completed as soon as possible were considered to be one-off events

In Morris Homes (West Midlands) Ltd v Keay [2013] EWHC 932 (TCC), Morris Homes (MH), the contractor, had purchased land from the Keay brothers (Keay) on which a medical centre was to be built and then leased back to Keay. The dispute arose out of MH’s decision to suspend construction work from July 2008 to January 2010 as it contended that because of the financial crisis it risked ‘commercial suicide’ if it continued with the project. Keay