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Interserve wins legal row over axed EfW job

A High Court judge has ruled in favour of Interserve in a dispute with Swiss contractor Hitachi Zosen Inova (HZI) over the cancellation of a contract on a £165m waste incinerator plant.   

HZI pulled its contract with Interserve in July 2015 after claiming that work had stalled on the project in Kidderminster, Worcestershire, and there were “signs that this delay would increase further”.

At the time, a source told Construction News that Interserve staff had been allegedly ordered to down tools and given just 20 minutes to leave the site.

This lack of notice period underpinned Interserve’s legal argument, with the Reading-headquartered contractor claiming HZI had “not been entitled to terminate without first giving notice” to Interserve.

Mrs Justice Jefford ruled there was evidence “that arrangements were then made to make the site safe and remove ICL (Interserve) staff and subcontractors from site”.

“Steps were then taken to prevent ICL’s return to the site,” she added, without the requisite notice period being served.

The judge decided to rule in favour of Interserve on the basis that HZI had not complied with the agreed seven-day period notice period required to cancel the contract.  

“In my judgement, on this issue, it is ICL’s argument that is right,” she said in her ruling. 

Problematic energy from waste (EfW) projects have caused huge problems for Interserve in recent times.

In February the firm warned that exiting problem EfW deals would cost the business £160m

The group issued a fresh profit warning last month, admitted it may breach its banking covenants this year, and revealed problem EfW contracts would cost it an extra £35m.

This led to a sharp fall in the firm’s share price, while new boss Debbie White warned of cost cuts and potential disposals

It is understood that the award of any damages remains subject to whether HZI chooses to appeal the case. 

Interserve declined to comment. Hitachi Zosan Inova and its lawyers have been contacted for comment. 

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