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Jacobs takes US architect to High Court over Qatar project dispute

A dispute between engineering contractor Jacobs and US architect Skidmore, Owings & Merrill looks destined for the High Court next year in what the judge has said may turn out to be largely another Wembley-style battle over legal costs.

The firms are in dispute over a job in Qatar that Jacobs UK – the Glasgow-based arm of the US engineering group – claims it was underpaid for, after the firms parted ways earlier this year.

It said it is owed £4.7 million plus interest for work on the Qatar Petroleum Complex Project at a site north of Doha, but now SOM has lodged its own claims worth more than £2.5 million.

During a pre-trial summary judgment, which was requested by Jacobs, the judge, Mr Justice Coulson, criticised both sides for what he said was already “lavish expenditure on costs”.

Mirroring comments from the judgment in the recent Wembley trial – where Multiplex and Cleveland Bridge ran up legal bills of more than £20 million – he said: “I apprehend that the principal issue will be costs, the levels of which are so high that both sides must now agree with the defendant’s Ms [Ashley] O’Connor, who months ago expressed the view that ‘withholding payment on really old invoices will be more trouble than it is worth’.”

Jacobs, which filed the writ against SOM in the summer, requested the court hand down a summary judgment for £755,000 on matters it was certain it would win.

But the firm ended up only walking away with £68,000 from the pre-trial hearing. It now plans to revive the claims it lost out on during the main trial.

The Technology and Construction Court in London heard Jacobs had paid £93,000 in legal bills in an effort to win the summary judgment, while SOM spent more than £200,000 opposing it.

Mr Justice Coulson said the resistance from both sides to attempt to settle the row “makes clear the extent of the gulf between them”.

Jacobs was engaged by the defendant for almost two years to carry out quantity surveying and project management work on the Qatar project.

The dispute occurred in February and Jacobs agreed to leave the project but demanded its outstanding payments.

The court heard both sides had agreed to keep quiet the reasons for the parting. In a letter to the client, Qatar Petroleum, SOM said: “It became clear, over the course of our work together, that Jacobs could not provide the resources necessary to fulfil their contractual obligations.

“As an example, the quality of construction cost estimating became a particular cause for concern.

“I should note that I have made a commitment to Jacobs not to publicly criticise them.

This letter is issued on the understanding that you and I will carefully control its contents.”

A pre-trial conference will now be held to decide a timetable for the full trial. It is hoped the conference will happen some time later this month, but a hearing date is not expected to be set until well into next year.

‘PETER REALLY DOES NOT WANT TO PAY THESE GUYS’

While the judge supported the view of Ashley O’Connor – an employee of SOM who tried to urge the dispute be resolved early on – her opinion only came to light by accident.

Her statement, quoted by Mr Justice Coulson, came from an internal email that was sent to the defendants by mistake.

Having received repeated enquires from Jacobs regarding unpaid invoices, Ms O’Connor emailed her superiors and said: “Another fun thing to deal with. Peter [McGill] really does not want to pay these guys but I think withholding payment on really old invoices will be more trouble than it is worth.”

But she had actually replied to a Jacobs email, not to her boss’s. When she realised her mistake, there was nothing she could do. “It lets you know where we are,” she told Jacobs after realising her mistake.