30 April 2013
Prime supplier and manufacturer successfully resolves sub-contractor claims
Following the instruction of two subcontractors in a large scale project for one of the world's leading manufacturers of microwave and communications technology, the Litigation and dispute resolution team at B P Collins LLP was engaged by the prime supplier and manufacturer, to resolve a dispute over performance and payment after the issue of multiple claims by one sub-contractor.
Despite the prime supplier's purchase order setting clear parameters as to milestone and timescale performance requirements, budget costs and the terms and conditions stipulating that time was of the essence in this contract, both sub-contractors failed to work together effectively and subsequently there was a breakdown of relations between the sub-contracting parties.
This led, in part, to one subcontractor failing to deliver in accordance with the required milestones, either on time or in full, and a loss of confidence on the part of the prime supplier. Despite this (and aside from the agreed budget) the same sub-contractor raised invoices for the full amount of the underperformed and late work and requested considerable additional payments to complete the existing requirements in the purchase order.
The sub-contractor's contract was subsequently terminated as a consequence of the non-performance and the resulting loss of confidence in the sub-contractors ability to complete the work within the required timescale. As a result of this failure, the prime contractor was placed under considerable pressure to adhere to its own timetable and was forced to incur considerable extra costs to provide an alternative solution.
The subcontractor then issued multiple claims for payment of its invoices, without first seeking legal advice and without any reference to the Pre-Action Protocols. B P Collins LLP was instructed to resolve the matter and, after mounting a rigorous defence and counterclaim and undertaking a process of firm negotiation, it was able to secure a commercially comprehensive settlement solution.