Humber Oils Terminal Trustees v Hersent Offshore Ltd (1981)

© Daniel Atkinson 1999

ICE 6^th Edition Clause 12 requires notice to be given by the Contractor. Clause 12(2) is directly linked to Clause 52(4) on the giving of notice of an intention to make a claim. The Contractor is required to give notice at the same time as the notice under Clause 12(1) or as soon thereafter as may be reasonable. At the same time or as soon thereafter as practicable the Contractor is required to give details of:

1. The anticipated effects;
2. The measures taken or proposed;
3. The estimated costs;
4. The anticipated delay;
5. The anticipated interference.

If the Contractor fails to serve notice as soon as is reasonable his entitlement to payment is limited to the extent that the Engineer is prevented or prejudiced by the late notice in his investigation of the claim. This was not always the case in the earlier Editions.

In the decision in Humber Oils Terminal Trustees Ltd -v- Hersent Offshore Ltd, 20 BLR 22 (1981), the conditions of contract were the ICE Conditions 4th Edition. The conditions provided under Clause 12.2 that if the Contractor intended to make any claim for additional payment, he was to give notice specifying:

1. The physical conditions and artificial obstructions;
2. The additional work and additional construction plant he proposed to use;
3. The extent of anticipated delay in or interference with the execution of the work.

The clause also provided that the cost of all work done prior to the giving of such notice was deemed to have been recovered in the rates and prices under the contract. Clause 12(3) also provided that the Contractor was to submit with the notice an estimate of the cost of the delay or interference if at the time of giving the notice the additional construction plant which the Contractor proposed to use was sufficiently defined. It was held that the clause contemplated that the Contractor shall not bear the risk of unforeseeable physical conditions or artificial obstructions, but only if the requirement of notice is fulfilled. The question therefore was what notice was required by the Clause?

It was considered significant that the information required to be given in a notice was necessary to allow the Engineer to make decisions which could be of crucial importance for the future implementation of the contract. It was considered that these considerations pointed strongly towards compliance by the Contractor with the provisions relating to the notice specified in Clause 12(2); and furthermore, since it was common ground that the risk of the effect of the encountered conditions only passed to the Employer after the notice is given, these matters also pointed strongly to the risk remaining with the Contractor until he complied with the requirements relating to notice. It was held that the quotation or estimate formed an essential part of any notice to be given under Clause 12(2), but that on the facts no notice had been given.