Multiplex wins first Wembley ruling by points

Multiplex, the contractor in charge of the crisis-hit Wembley stadium project, claimed a major points victory in its bitter legal row with the company originally contracted to carry out work including the iconic steel arch.

A High Court judge ruled in favour of Multiplex on key issues relating to breach of contract in a dispute with steel contractor Cleveland Bridge.

But Mr Justice Jackson stressed that neither party had won "outright victory" and urged both sides to reach an overall financial settlement by negotiation or mediation.

Multiplex, which blames Cleveland at least in part for the delays which have bedevilled development of the new £757 million, 90,000-seat national stadium, had sought up to £45 million, including damages, from Cleveland.

Darlington-based Cleveland, which walked off the site in August 2004 citing breach of contract, counter-claimed £22.6 million.

The judge, in the Technology and Construction Court in central London, made a series of preliminary rulings designed to "break the deadlock" in a complex dispute in which each side accused the other of "repudiatory" breach of contract - a breach so fundamental that the aggrieved party may treat the contract as terminated and sued for damages.

Cleveland spokeswoman Claire Davidson said after the judgment: "This was a preliminary trial. The result is helpful and should now allow both parties to reach an early resolution of the remaining issues we now have in dispute."

Delays in completion of the prestigious Wembley complex have resulted in major sporting events being moved to other venues, including Twickenham and Cardiff's Millennium Stadium.

As an example of the problems surrounding the steel sub-contract, the judge said a quantity of raw steel had been sent to China to be fabricated.

But some of it then had to be shipped back to the UK for fabrication, at a higher cost.

"The Chinese authorities were puzzled as to why a large quantity of steel was shipped halfway round the world, only to be sent back to the UK," the judge said.

"At one stage, they suspected a smuggling operation."

The judge said other problems arose when Multiplex complained about defective steel work in the arch and the stadium bowl - denied by Cleveland - and about late and out-of-sequence deliveries of steel to the site, resulting among other things in delayed erection of the emblematic arch.

Cleveland, in turn, accused Multiplex of causing delays by the manner in which it was managing the project.

It denied negligence and breach of contract, and pointed to a clause in its original sub-contract which limited its liability, in any event, to £6m.

The case was adjourned until when the judge will hear any application by Cleveland for leave to appeal.

Multiplex's lawyers indicated that they would be seeking interim costs order - part payment of their legal costs regardless of how the dispute now proceeds - "on the basis that we have basically won on the issues".

Whatever the end result, all those involved in the project can take comfort from Mr Justice Jackson's assurance that they should be justly proud of what they have achieved.

"Having visited the site, I have no doubt it will be a world-class sports stadium," he said.

"Long after these present problems, all parties can take pride in what they have created."