| Date | 31 May 2006 |
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| Judgment | Ove Arup & Partners International Limited v Mirant Asia-Pacific Construction (Hong Kong) Limited, CA 21 December 2005 |
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| The Issue | The extent of an engineering designer’s duties to verify its initial design assumptions. |
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| Implication |
Where a designer has insufficient information on which to complete an element of the design, the design may proceed on assumptions but the designer carries the obligation to verify those assumptions at an appropriate later stage. |
printIn early 1995 Mirant Asia-Pacific Construction were engaged to design, construct and commission a coal fire power station at Sual in the Phillipines. Mirant engaged Ove Arup & Partners as a sub-consultant for engineering design work. Disputes arose between the parties when foundations for one of the boiler houses failed. The failure occurred very early in the construction of the superstructure when the load was a very small fraction of the eventual design load. Arup had entered into two contracts with Mirant, a design agreement and a ground investigation agreement. The second of these incorporated the FIDIC contract terms which included a cap on liability of £4 million. Not surprisingly, Arup argued that if they were in breach at all, it was a breach of the ground investigation agreement which would bring into play the cap on liability. Mirant disagreed. Arup’s failure, they argued, was to have failed to design the foundations properly in accordance with their obligations under the design agreement. The site for the power station was a seaside promontory from which some 20m of ground had to be removed by blasting and excavations. The eventual ground level for the formation of the foundations for the boiler house was thus well below the original ground level. Arup’s design of the foundations for the boiler house was based upon an assumption that the relevant ground would have a bearing capacity of 3MPa (mega pascal, a standard unit of pressure). This was an assumption only, which depended on the available site and geological information which Arup’s principal geologist regarding as incomplete. Indeed Arup had put forward a ground investigation proposal which recommended, among other things, geological mapping, bore holes, trial pits and probe holes under the full time supervision of an experienced geologist. In the event, no additional bore holes were undertaken. The nearest bore hole at the site of the boiler house foundations was 100m away. Nevertheless, Arup agreed to proceed with the detailed design leaving the load bearing assumption to be verified later. A ground investigation sub-contractor was appointed but they carried out no further works in the area of the boiler house and their activities scarcely added to Arup’s knowledge of the ground conditions in that area of the site. The structural concrete for the foundations was poured in late January 1997 and the foundations were handed over for steel erection approximately two months later. Before steel erection could commence, movement in the foundations was noticed. A trial pit was dug adjacent to the foundations and it was immediately obvious that the foundations rested on very weak material. The ground was soft enough to be excavated to a considerable depth using only a spade. Examining all of these matters the judge concluded that Arup were under an obligation to exercise due care and skill in designing the structures on ground that could bear their weight without movement beyond the permitted maximum set out in the contract. In order to discharge this obligation, Arup had a duty under the design agreement to be satisfied that the design could be achieved on the basis of investigations carried out by it and by others. This required a verification process to confirm the preliminary design assumptions. The evidence made it clear that Arup was aware that the verification process needed to be both systematic and detailed. Arup had therefore failed to exercise due care and skill in verifying the design assumptions. If that detailed verification process had been carried out, the variability of the ground under the boiler house would have been identified and on the balance of probabilities the subsequent loss and damage would have been avoided. In rejecting the appeal against this decision in the Court of Appeal, Lord Justice May emphasised the following points:
CJ-0621
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