Norwest Holst wins landmark legal battle

Norwest Holst has won a landmark legal battle over adjudication provisions in the Construction Act.

The latest skirmish in how the Housing Grants, Construction and Regeneration Act 1996 is interpreted went Norwest’s way in a High Court hearing this week.

Mr Justice Ramsey made his ruling in a preliminary skirmish to a dispute between Norwest Holst and Danieli Davy Distington. The court upheld Norwest’s claim that the work involved was not precluded from the adjudication process by the 1996 Act.

Both companies entered into a contract in 2005 under which Norwest undertook civil engineering and building work which included designing and constructing a casting pit at a steel production facility.

A row broke out on the job which was referred by Norwest to adjudication. The High Court was then asked initially to decide whether the work at the centre of the dispute was, in the eyes of the law, to be viewed as construction operations under the provisions of the 1996 Act.

Norwest argued that it was because the Act, among other things, stipulates that “assembly, installation or demolition of plant or machinery, or erection or demolition of steelwork for the purposes of supporting or providing access to plant or machinery, on a site where the primary activity is … (ii) the production, transmission, processing or bulk storage (other than warehousing) of chemicals, pharmaceuticals, oil, gas, steel or food and drink’” are not construction operations.

Norwest agreed that the primary activity on the relevant site was to be the production, transmission and processing or bulk storage of steel but nevertheless argued that the work it was contracted to carry out was not precluded by the Act.

The judge has now backed Norwest ruling that on true construction of the provisions of the Act the operations at the centre of the case were not to be regarded as “assembly or installation of plant or equipment pursuant.”