On 27 May 2019, representing Mosty Łódź S.A., we obtained a judgment handed down by the Appellate Court in Łódź affirming the judgment of the lower court awarding to the contractor nearly 32 million zloty (including interest) from the City of Łódź.
– The judgment of the Appellate Court confirmed that contractors may claim remuneration (exceeding the fixed remuneration) for additional and substitute works if for reasons beyond contractor’s control a facility (railway bridge) is designed and constructed in a manner deviating from the contract provisions. This non-appealable judgment paves the way for other construction companies performing contracts in the “design and build” formula and enables them to assert claims for additional payments in excess of the contractual fixed remuneration if the methodology of the works performance specified in the bid must be changed. So far there have been no unequivocal judicial decisions on this issue”, says Andrzej Sokołowski, legal counsel, Partner of JDP.
The litigation concerned, among other things, the construction of a railway bridge in the course of designing and constructing a section of the so called Upper Route in Łódź. During the performance of the project circumstances being beyond contractor’s control arose, preventing the contractor from constructing the bridge by the so called “split-half method” (as specified in the bid) allowing for continuous rail traffic on one track. Since after conclusion of the contract it proved necessary to secure traffic on both tracks, the originally chosen technology needed to be replaced by one allowing for construction of a new bridge alongside the old one and a complex manoeuvre of demolishing the old bridge and moving the new one in its place in just 68 hours. The above required the contractor to design and perform a considerable quantity of additional and substitute works falling beyond the scope of the bid submitted in the tender procedure. The employer refused to pay for such additional and substitute works, relying on the “design and build” formula and the fixed amount of the remuneration. Mosty Łódź, assisted by JDP, was taking measures seeking to make a settlement, however, as the employer was not willing to settle, Mosty Łódź was forced to pursue its claims through judicial means. The judgment is final and non-appealable. It is noteworthy that since the employer was not willing to make a pre-litigation settlement, it had to pay additionally nearly 8 million zloty from public funds after the final and non-appealable judgment was delivered.
Mosty Łódź S.A. was represented by legal counsel Andrzej Sokołowski (Partner), Professor Przemysław Drapała (Partner, Head of Litigation and Arbitration Team and Infrastructure Team), assisted by advocate Jakub Majewski (Associate) and advocate trainee Jaśmina Łyczewska (Associate).
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