Only a handful of decisions from the UK courts consider the interpretation of NEC contracts. Given how widely the NEC suite is used, any guidance on the interpretation of the core and optional clauses is to be welcomed. 

A recent decision of the Inner House of the Court of Session, namely SSE Generation Limited vs Hochtief Solutions AG and another, considers a number of key NEC2 provisions. 

The dispute arose out of the collapse, in 2009, of the headrace tunnel built by Hochtief at SSE’s Glendoe hydroelectric scheme in the North of Scotland. Hochtief refused to carry out repair works, so a separate contractor had to be engaged, and SSE was seeking to recover its losses. We were fortunate to be able to sit in on the majority of the court hearings in this case. 

The majority considered the collapse of the tunnel to be at the contractor’s risk

Although the decision covers a number of interesting points, a pivotal issue is the impact of the inclusion of Option M in the contract. 

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