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In brief: Privy Council considers nature of lump sum contract (Mascareignes v Chang Cheng)

In brief: Privy Council considers nature of lump sum contract (Mascareignes v Chang Cheng)
Published on: 20 July 2016
Published by: LexisPSL
  • In brief: Privy Council considers nature of lump sum contract (Mascareignes v Chang Cheng)
  • Original news
  • What was this case about?
  • What did the board decide?
  • What should construction lawyers take note of?

Article summary

Construction analysis: The Privy Council, on an appeal from the Supreme Court of Mauritius, held that an arbitrator was wrong in law to conclude that a lump sum contract, based on the JCT Standard Form of Contract 1980, had been varied by the parties as a result of significant additional and substituted works so as to become a measure and value contract. The board also considered that the arbitrator was correct to dismiss the employer’s counterclaim for the costs of appointing third parties to carry out certain works—even if the contractor had been in breach, the employer had not identified any loss, ie excess payment over what it would otherwise have paid the contractor. The board further held that the arbitration agreement comprised two separate agreements, which were to be read together in determining the ability to appeal the arbitration award. or take a trial to read the full analysis.

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