One Blackfriars Road
A cladding contractor has prevented its bank from paying out a £4.4m guarantee to Multiplex that the main contractor tried to access following a dispute over delays to a London tower.
The main works and subcontract works on the 170m-high One Blackfriars Road project were delayed but Multiplex and Chinese cladding subcontractor Yuanda are in dispute over the cause of the delay.
Multiplex has asserted that Yuanda are to blame, while Yuanda claimed they are entitled to an extension of time.
Multiplex entered into a compromise agreement with its client, upscale developer St George, for matters under the main contract on 17 October last year.
Multiplex had a cap in the main contract on liquidated and ascertained damages (LADs) payable to the client of £7.5m. Without the cap, Multiplex was liable for up to £55m for delays.
Multiplex and the client agreed that Multiplex would pay LADs of £7.5m. Multiplex in turn demanded £7.5m in LADs from Yuanda but Yuanda denied it was responsible and submitted its own claim to Multiplex. Yuanda has been paid £41.9m for the works but claimed that the total including loss and expense should have been £48.9m.
As a result, Multiplex started an adjudication against Yuanda, with a decision due on 6 March.
Meanwhile on 17 January this year, it made a demand to Yuanda’s bank for £4.4m under a guarantee. However, Mr Justice Fraser ruled in the High Court that the guarantee is a performance bond rather than an on-demand bond and ordered Multiplex to wait for the result of the adjudicator’s decision in respect of the LADs it has claimed against Yuanda.
