Row over National Children's Hospital contract admitted to Commercial Court

The development board of the new National Children’s Hospital earlier this month initiated legal proceedings against the main contractor on the project, BAM Building Ltd.
Row over National Children's Hospital contract admitted to Commercial Court

A row over a building contract relating to the construction of the new National Children’s Hospital has been admitted to the fast-track Commercial Court.

The development board of the new National Children’s Hospital earlier this month initiated legal proceedings against the main contractor on the project, BAM Building Ltd.

The action is over a claim by BAM Building Ltd. disputing the validity of the instruction given by the board to begin the Phase B above ground construction works in January 2019.

This claim was rejected by the National Paediatric Hospital Development Board (NPHDB) but an internal dispute management process failed to resolve the matter.

Mr Justice David Barniville today admitted the dispute to the list of the Commercial Court which deals with big business matters.

The National Children’s Hospital is expected to cost in the region of €1.7bn.

Michael Cush SC for NPHDB told the court that as of late on Tuesday night, agreement had been reached between the parties as to the entry of the case to the Commercial Court list.

He said the case related to a crucial aspect of the contract and the Phase B construction. Agreement, he said, had also been reached on directions for the management of the case.

Counsel said there was one area of disagreement remaining which related to the urgency of the case.

He said the NPHDB see “enormous urgency” in the resolution of the dispute and he said the contract was of “such enormous magnitude.”

Admitting the case to the Commercial Court list, Mr Justice Barniville said he was satisfied there was no delay in bringing the application and because of the size of the contract along with the public dimension and its commercial importance, he was prepared to admit it to the list.

The judge also noted the disagreement between the parties as to the urgency of a hearing.

The court heard that BAM Building Ltd in filing a defence is also considering a counter claim in the proceedings.

The case will be mentioned before the court again on July 30.

The legal row hinges on a claim by BAM Building that the board was required, under a contract signed in August 2017, to provide it with a “complete fully coordinated” design before the Phase B instruction was issued.

The company claims this was not provided as required by the contract and that the design remains incomplete.

The NPHDB disputed the arguments made by BAM Building but a conciliation process failed to lead to a resolution of the matter and the hospital board issued High Court proceedings against the building company earlier this month.

At the time, NPHDB in a statement said: “Given the importance of the works, the cost and the date for completion of this critically needed new children’s hospital, it is essential that this fundamental contractual issue is definitively resolved.

"In order to rigorously defend the public purse, the NPHDB has been left with no option but to bring the matter to the High Court.”

In a statement, BAM Building said: “As the parties have been unable to agree on this issue, BAM welcomes the fact that the issue will now be subject to a proper and careful analysis, and ultimately resolution, by the Courts.

"BAM agrees that it is important that these issues be resolved so that all parties can concentrate on the delivery of this vital project to the highest standard in the shortest possible period.”

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