Mr Justice Langley :
INTRODUCTION
- This claim arises from the failure on New Year's day 1995 of a fibre optic cable (FOC) telecommunications system linking two platforms, known as Lomond and North Everest, in the Central Graben Field in the North Sea.
- The claimant (Amoco) was the operator of the platforms. It was assisted by consulting engineers, Brown & Root Vickers Ltd ("B&R"). The defendant (TCL) is a cable specialist. TCL largely operated under its divisional name of GPT Submarine Communications (GPT). TCL was the main contractor under a contract with Amoco for the supply and installation of the system. TCL subcontracted to BT (Marine) Limited (BTM) the subsea laying and protection of the FOC between the two platforms. They are some 65kms apart.
THE ISSUES
- Amoco's claim is made under the express terms of the contract alternatively for damages. The cable parted at a design "weak" link at the approach to the Lomond platform on 1 January 1995 in the course of a severe storm. The claim is for the repair of the cable and associated costs. The work was in fact done by TCL, and Amoco paid for it. Amoco claims under Article 5 of the contract on the basis the failure occurred in the 24 month warranty period alternatively on the basis that the reason for the failure was that the FOC was not properly protected against instability from storms and that the system was therefore defective.
- TCL denies that the contract on its proper construction provides Amoco with a remedy in circumstances where, as it asserts, Amoco took the design out of TCL's hands, instructed TCL to do what it in fact did, and the cause of the failure was the result of Amoco itself not carrying our permanent work to protect the cable when it knew that TCL's work provided only a temporary solution as a result of the circumstances in which a variation (CVN 1) was made to the contract. A Limitation point is also raised but as this only affects one of the bases on which Amoco makes its claim under Article 5 it is of no substantive importance. Quantum is agreed in the principal sum of £1,236,157.
THE MAIN CONTRACT
- The contract was made in early March 1992. At the time the Everest and Lomond platforms were themselves undergoing construction work. TCL was described as "Contractor". The following provisions of the Articles of the contract are material:
"1.17 "Work" means: all the duties and obligations undertaken by Contractor under the Agreement and all activities and operations carried out in connection therewith together with the physical result of the performance of such duties, obligations, activities and operations for the design, supply and installation of Fibre Optic Cable System and ancillary works in accordance with the Agreement
.
2. Scope of Work.
2.1 Contractor shall, subject to the provisions of this Agreement, commence the Work
and complete the same in accordance with the Project Schedule to the satisfaction of Amoco.
2.2. Contractor shall provide all materials, equipment, personnel, supervision, engineering and other services and all other resources and things required or necessary for the satisfactory performance and completion of the Work to the satisfaction of Amoco
.
5. Acceptance of the Work.
.
5.1.2.
Amoco shall deliver to Contractor a Certificate of Completion
.
5.2. Defects Warranty.
5.2.1 Contractor warrants and guarantees that the Work shall be performed in a first class and professional manner, in accordance with good and sound offshore engineering craft and construction practices, and in accordance with the requirements and conditions of this Agreement, and shall be free from defects, and that the Work and all materials, goods and equipment incorporated into the Work and all parts thereof shall be prime quality, in new condition, suitable for the purpose and use for which they are intended and shall perform in accordance with the requirements and conditions of this Agreement.
5.2.2. Irrespective of whether any designs, data or information have been provided by Amoco, Contractor undertakes to maintain and keep the Work in proper working order and guarantees and warrants the design, workmanship and all materials and equipment fabricated or provided by it or any of its Subcontractors against any and all defects in the design, workmanship and all materials
for a period of
(24) months from the date of issue of the Certificate of Completion. Contractor shall promptly execute, at its own cost, all such work of repair, rectification, replacement, making good of defects,
and such other faults in the Work and/or all materials and equipment provided by contractor or any of its subcontractors
which becomes apparent within the said
(24) month period
11. Changes.
11.1. Changes to the Work.
11.1.1. Contractor shall, subject to the provisions of this Agreement, perform changes to the Work to the extent that it is reasonably practicable to do so
.
11.1.2. Contractor shall make such changes to the Work whether by additions, modifications or omissions thereto as from time to time and at any time instructed by Amoco subject to the provisions hereunder.
11.2. Identification and Notification: Contractor shall be responsible from time to time for promptly identifying and notifying to Amoco
any increase or decrease in the amount contractor considers should be payable to contractor pursuant to this Agreement. Any such notification shall be called a Contract Variance Notice (hereinafter "CVN"). In the CVN contractor shall state the reason for the change
.
27. Entirety of Agreement.
This Agreement
constitutes the entire agreement between the parties hereto
. This Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both Amoco and Contractor by their respective duly authorised representatives."
- Appendix I provided for "Pricing and Payment". Prices and rates were "firm and fixed". Paragraph 3.3.6 of Appendix 1 provided:
3.3.6 Sub-Sea Cable Installation and Tie-in. The price for Sub-Sea Cable Installation and Tie-in shall include for the provision, storing, handling and transport of cable and associated material
The price
shall include for the provision of all
cable laying and ploughing, cable protection,
cable support and protection.
- Appendix II provided for "Scope of Work". The "Introduction" stated that as part of the development of the Central Graben project and the pipeline (known as CATS) which was associated with it a telecommunications link was required between the Everest and Lomond production platforms which required "the design, construction, installation and commissioning of a Fibre Optic Cable System
." It continued that
" The Scope of Work, as described in this Appendix
sets out the Work to be performed by Contractor to achieve design, construction, installation and commissioning of the required Fibre Optic Cable System."
Paragraph 2, under the title "General", included the statement that
"The Work
shall generally comprise the complete management, design, procurement, supply
construction, installation, testing and commissioning of the complete
system between and indicating the fibre optical terminal equipment in the Telecommunications Equipment Rooms on both the North Everest and the Lomond platforms."
- Paragraph 3.4.4 of Appendix II under the title "Subsea Cable Installation and Final Hook-up" included the following provisions:
"Contractor shall install the subsea cable between the North Everest and Lomond splice boxes which shall include the subsea survey, cable laying and ploughing, cable protection
.
Contractor shall bury the subsea cable by a suitably safe and efficient method
Contractor has not made allowance for any pipe
crossings.
Contractor requires that the lay/burial is not impeded by Amoco's Flotel, anchor wires or anchors and has made no allowance for such.
Contractor expects to be given an anchor free zone in which to lay the cable.
Contractor shall
carry out the operations necessary to
install permanent (matting) protection between the point of emergence of the cable from the seabed to the touch-down point of the bend restrictor catenary
.
Contractor shall arm the weak link and protect the weak link/conversion joint with concrete matting."
- In summary the contract was for the design supply and installation of the complete system (Article 2 and the definition of "Work"). TCL warranted and guaranteed that the work would be free from defects and suitable for its purpose and use (Article 5.2.1). TCL also agreed to repair any defects at its own cost which became apparent within 24 months from the Completion Certificate. Amoco had the power to change the work (Article 11.1) but had to account for it in accordance with a CVN (Article 11.2). The Scope of Work included cable protection (Appendix II). TCL was entitled to have an anchor free zone to work in and not to be impeded by any "flotels". A flotel is floating accommodation for platform workers. Flotels can be anchored adjacent to a platform and connected by a gang plank. It is also possible to use the anchors and anchor wires to move the flotel to a stand-by position away from a platform. The range of flotel anchor wires exceeded 500 metres.
THE WITNESSES
FACTUAL
- Amoco called four witnesses. Mr Graham was the Senior Project manager for the project. Mr Booty was a Senior Telecommunications Engineer employed by B&R and assigned to Amoco for the project. Mr Pinkerton was contracted by Amoco as a Contract Administrator responsible for the commercial control of the FOC contract. Mr Beynon was contracted to Amoco as a Senior Project Engineer mostly concerned with management of the CATS project. TCL called two witnesses. Mr Culpin, the Project Manager for BTM and Mr Best the Project Manager for TCL/GPT.
EXPERT
- The expert witnesses were Mr William Neilson (called by Amoco) an engineer with many years experience in subsea projects, and Dr Bent Lyngberg (called by TCL) also an engineer with similar experience.
THE SYSTEM
- It is not necessary for the purposes of this judgment to give more than a rudimentary description of the telecommunications system and the laying of the FOC as part of it.
- The platforms each had "on-platform" cables running to their telecommunications equipment rooms. These cables had to "hook-up" with the subsea cable.
- The subsea cable had first to be attached to what were called "J-tube cables" which were cables running through the "bellmouth" of J-tubes (so called because of their shape) close to the sea bed to the equipment room where they could be hooked up to the on-platform cables. The subsea cable once attached to the J-tube cable could be pulled into the J-tubes. The contract contained only very limited specific provisions for how the subsea cable itself was to be laid and protected. It envisaged (as in fact happened after a short time when the process was expected to be reversed) that the cable would first be hooked up at Lomond and then laid across the seabed and finally hooked up at Everest.
- There are a number of ways in which cables can be protected and a number of hazards from which they may need to be protected.
- The protections include laying in a trench, cover by rock dumping, cover by concrete mattresses (hexagonal concrete blocks linked together by flexible couplings) or any combination of them and, particularly at places where the cable rises off the sea bed, by supporting it underneath with grout bags, and then covering it.
- The hazards are hydrodynamic forces which can and do operate on the seabed of the North Sea and can make a cable unstable and cause it to move; fishing nets and trawls which travel along the seabed; anchors and anchor wires; and, particularly in the vicinity of about 100 metres around platforms, dropped objects such as scaffold poles.
THE CONTRACT PROTECTIONS
- The contract required TCL to submit a detailed installation plan to Amoco. This was done in December 1992 and January 1993. The Specifications in Appendix IV to the Contract also made some provisions for cable laying and protection. Cable laying and ploughing was to be done by BTM's vessel "Discovery", using BTM's submersible plough system. The contract specifications provided that at the platform approaches the cable would be laid and buried in a trench to be dug by a remotely operated trenching machine called "Eureka" then under construction for BT. Finally for the small lengths between the weak link and the bellmouth which Eureka could not trench the cable was to be covered with concrete mattresses. Discovery could not operate in the approaches to the platforms. The cable was paid out from the stern of the boat and at the first location (Lomond) the boat could approach within about 200 metres of the platform but at the second location could only approach within about 485 metres because allowance had to be made for the length of the boat itself as well as the plough wire catenary (curve). Eureka, operated from the surface, was intended to provide a solution for the areas the boat could not reach. There was no reference in the Specifications to rock dumping.
ROUTE CHANGE
- By early May 1992 Amoco had decided to change the anticipated route of the cable by choosing the route referred to as Option 3. The specification of the installation had to be developed to accommodate this and the further consequence that the cable would now pass under the flotel anchor wires and so would require protection against them. It then became:
i) From the bellmouth of each J-tube at each platform to a point 200 metres out the cable was to be protected with single uraduct (also referred to as CRP). Uraduct is hard "polyurethane" cladding. The first 30 metres or so would not be trenched but would be protected by rock dumping over the cable and over the designed "weak link".
ii) The weak link was formed at the connection between the subsea cable and the J-tube cable. It was a splice box which, once it was "armed", would enable the cables to part at a force lower than would damage the equipment on the platform in the event that the subsea cable was snagged and pulled.
iii) From the weak link to a point 200 metres from each platform the cable would be trenched using Eureka. Thereafter it would be ploughed.
iv) Option 3 route also required the cable to traverse two pipelines, one with a diameter of 14" and the other a diameter of 36". The crossings were to be formed by a first rockdump across the pipelines (to form a separation blanket) laying the cable on top and then protecting the cable itself with a second rockdump.
- This scheme was agreed between Amoco, TCL and BTM at a meeting held on 6 May which followed a meeting on 22 April between TCL and BTM. On 22 April, because the cable was to pass under anchor wires, BTM recommended (as the minutes record) the use of uraduct "as a means of additional protection until it could be mattressed". The minutes of the meeting on 6 May record BTM's proposal to use uraduct (described as CRP) to meet the chafing danger from the Flotel anchor wires. Uraduct could be applied to the cable before it was laid.
- The need for rock dumping to be carried out at the pipeline crossings was discussed at a meeting on 15 June at which Mr Best and Mr Culpin were present as well as Mr Beynon, Mr Booty, Mr Pinkerton and others from Amoco. The Minutes refer to "a general discussion on rockdumping methods" and an agreement that "a cost saving could be achieved if Amoco laid the separation blanket".
NO EUREKA
- Towards the end of June 1992 BTM learnt that Eureka would not be ready in time for work on Everest and Lomond. BTM (Mr Culpin) wrote to TCL/GPT on 23 June reporting this and adding:
"In view of the soils strengths around the platform areas of the Graben Development it is our proposal that the unploughed sections of the cable will be protected by rock dumping. This method of protection is compatible with Amoco's infield rock dump over untrenched pipelines at the platforms and for the proposed pipeline crossings on the option three cable route."
- Mr Best passed this on to Amoco the next day adding:
"The cable protection rock dump will cover the points where ploughing starts/ends and could reach each Bellmouth and will also cover the pipeline crossings. At Lomond the rock dumping will be approximately 200 metres and at N. Everest (end of cable installation) approximately 500 metres. The area between the pipelines will be approximately 600 metres.
To allow the dumping vessel access up to the platform both at Everest and Lomond it will be necessary to lower one or two of the anchor wires of the respective flotels. The anchor wires will only require to be lowered when the vessel closes with the platforms. The procedure for this is normal in North Sea operations and will take due account of prevailing weather conditions and operational activities around the platform.
The alternative to this is to leave the cable unburied but with CRP protection over the unburied sections until such time as the flotels have left the site. As the unburied areas are well within the anchor patterns of the flotels and will be protected against anchor wire damage by CRP it is considered that the cable could be safely left in this condition until such time as access could be gained, either by the rock dumping vessel or by our alternative new build trenching vehicle.
Should Amoco select a "deferred start" to install the cable then either it will be protected by burial using the new vehicle or by rock dumping as previously described.
We regret this change of circumstances, which unfortunately as you can see is outside our control, and would welcome the opportunity to discuss the situation in the light of your forthcoming adjudication of our pipeline crossing proposal."
- There is no doubt that moving the flotels to allow rock dumping at the platform approaches would involve disruption to the construction programme for the platforms with serious cost implications which Mr Graham was under instruction and concerned to avoid if at all possible.
- On 6 August Mr Culpin sent Mr Best a revised scope of work for the sub-contract noting that temporary protection of non-ploughed cable at the platform approaches against Flotel anchor wires in their stand-by positions was to be by CRP and permanent protection by rock dumping up to the weak links then mattressing up to the bellmouths of the J-tubes. This was reported at a meeting with Amoco on 11 August when Amoco confirmed agreement. Amoco also then agreed that it would effect (free issue) the first separation blanket rock dump at the pipeline crossings but not the second rock dump at the crossings nor the rock dumps at the platform approaches which would be part of the option 3 cable route variation.
THE SEPTEMBER MEETINGS AND TESTS
- There was an important meeting on 8 September at which Amoco was undoubtedly seeking to avoid moving the flotels and so looking for alternative solutions to protect the cable. As with all meetings, minutes were kept. The minutes record that "the purpose of the meeting was to find a way of providing cable protection at the platform ends without moving" the flotels offstation. There are doubts as to whether or not Mr Graham was present at the meeting (which are of no real importance) and some questions were raised on behalf of TCL about the accuracy of the minutes. But Mr Best and Mr Booty both signed the minutes as accurate (albeit some weeks later) and the burden of the oral evidence plainly confirmed their accuracy. The conclusion of the meeting was expressed to be:
"To avoid the Flotel going on standby two possible solutions were identified.
(i) To rock dump a protective trench prior to the Flotels coming alongside the platform albeit that the cable was still vulnerable to dropped objects.
(ii) To consider the use of CRP to protect the cable against dropped objects in which case the protective trench would be unnecessary."
- BTM was to enquire into dropped object protection and if necessary to undertake tests. The second of these possible solutions is minuted as arising from Amoco's suggestion that the use of CRP as a protection against dropped objects should be explored because it could provide "an alternative to mattressing and rock dumping thus avoiding the necessity for the Flotels to move offstation". Amoco's evidence is that it always saw the suggestion as a permanent alternative and the minutes of this meeting at which it was first raised provide strong support for that.
- Tests on CRP did take place on 18 September at CRP Marine's premises in Skelmersdale. Tests with double CRP were successful. Tests with single CRP were not. The conclusions were minuted:
"The tests demonstrated the suitability of CRP as a practical means of providing protection against dropped objects at the platform ends.
CRP protection at each platform end to be single protection 250m and double protection 100m.
CRP protection was for dropped objects and not dragged objects.
At N. Everest there was approx 30m of cable which was still vulnerable to dragged objects which in the event could be rock dumped in conjunction with the pipeline crossing dump operation."
- Thus double CRP was to be used in the area of 100m nearest the platforms most at risk from dropped objects. The risk of dragged objects was one Mr Graham said Amoco was prepared to take especially as vessels were not permitted to come within 500m of platforms, and a small area (later increased) was to be rock dumped at Everest (the second end) because the ploughing could not get as close to of the platform as it could at Lomond and, as the minutes record, it was perceived that there was a risk of dragged objects within the outer limits of the 500m zone. Mr Graham said, and I accept, that everyone was relieved that a solution had been found.
- It was this solution (with an increase to the length of the rock dumping at Everest) which was adopted and installed and, in the event, at Lomond failed.
- It is notable that at none of these meetings or thereafter, so far as documented, was there any discussion of protection against hydrodynamic forces, any suggestion that the solution arrived at was only temporary or any suggestion that the platform approaches should subsequently be rock dumped and/or mattressed.
CVN 1
- CVN 1 was first submitted on 10 November 1992. A corrected version was submitted on 24 February 1993. The summary description of the work to which it referred was:
"i Rock Dump protection at Pipeline Crossings.
ii CRP Protection at platform approaches to permit Flotels to remain on station."
- The "justification" for the CVN was
"Request by Amoco to amend the current scope of work to include the crossing of two infield pipelines and completing the platform approaches with the Flotels remaining on station."
- The estimated cost was £511,783.
- Amoco, by Mr Pinkerton, produced Contract Change Order No 1 dated 1 March and authorised on 3 March accepting CVN 1.
- Mr Allen submitted that the effect of CVN 1 was that to Amoco's knowledge TCL's designed protection could not be implemented and that what TCL was instructed to install could only be temporary. In my judgment that submission is simply not borne out by the history and origin of CVN 1 which I have stated, nor indeed by subsequent events. CVN 1 was a jointly arrived at solution to a problem with two causes: the lack of Eureka and Amoco's strong desire (despite some of the terms of paragraph 3.4.4 of Appendix II to the contract) for all necessary work to be done with the flotels alongside the platforms. Mr Best himself, on 16 October 1992, had described "the revisions to the scope of work permitting the Flotels to remain on station during installation of the platform approaches" as "minor". Rock dumping formed no part of CVN 1 for the platform approaches nor did it ever become the subject of a variation as a "design". CVN 1, as it said, was to amend the scope of work to include "completing" the platform approaches with the Flotels remaining on station (my emphasis).
INSTALLATION
- The cable was installed during February and March 1993. It remained exposed at North Everest from the part protected by single uraduct for some further 235m before the ploughed section and also exposed at the pipeline crossings on top of the first separation blanket rock dump which Amoco had carried out as agreed. On 18 March TCL issued an Acceptance Certificate, countersigned by Amoco, to BTM which certified that the cable had been successfully installed subject to "areas of non-ploughed cable laying exposed on seabed awaiting subsequent protection by rock dumping."
SUBSEQUENT ROCK DUMPING
- BTM sub-sub-contracted the second rock dump to Westminster Offshore AS in June or July 1993. By early July it was known that the flotels would have left the platform before the scheduled rock dump. On 7 April BTM (Mr Culpin) had responded to a request from Amoco at a meeting on the previous day by sending TCL/GPT (Mr Best) a schedule of extra costs for rock dumping. The costs were stated for the pipeline crossings and at the Everest approach to within about 170m of the platform and for other areas where it was known that the ploughing had not been effective. No other mention was made of rock dumping over either the single or double uraduct at the platform approaches. Amoco, on 7 May, had also requested Mr Best to incorporate in TCL/GPT's final report a reference to "the outstanding rockdumping to be performed for protection".
- Mr Best's response is to be found in paragraphs 2.4.1, 2.4.5 and 2.6 of the final report (which appear to have been prepared later in May) as follows:
"2.4.1. Lomond Approach.
Ploughing of the cable started at 215m from Lomond's bellmouth. This section of surface and cable is protected by Uraduct, double out to 100m then single out to 280m. Rock dumped cable protection is not required at the Lomond approach.
2.4.5. North Everest Approach.
. Rock dumped cable protection is only required up to 170m from N. Everest's bellmouth which is a total of 507m. Again this end has uraduct cable protection of double out to 100m from bellmouth and single to 280m.
2.6. Rock Dumped Cable Protection.
Due to the unavailability of the rock dumping vessel a guard vessel has been stationed at the pipeline crossings until rock dumping can be carried out. Other areas of surface laid cables requiring rock dumped cable protection are North Everest approach from end of the ploughing to 170m of the bellmouth."
- Mr Culpin was unsurprisingly cross-examined about these provisions. He said they were just reporting on the condition of the cable laying at the end of the work and only referring to BTM's scope of work. But that is not at all how they read nor what Amoco had requested. To say the least, if there was a perceived need for further rock dumping up to or approaching the bellmouth even by Amoco it is remarkable it was not mentioned.
- The second rock dump was in fact carried out in August and completed on 14 August. There was nothing then to hinder dumping at the approaches to the platforms but no one suggested it should be done. The logistical and financial logic of doing all necessary rock dumping at one opportunity is obvious.
COMPLETION
- A Certificate of Completion of the Contract was issued pursuant to Article 5.1.2 on 20 January 1994.
SPARES
- In October 1993 TCL/GPT (Mr Best) was preparing a quotation for spares for the system. The spares included recommended minimum holdings of uraduct, adhesive and banding and the like. Mr Berry QC for Amoco made the point that if it had been intended to rock dump the area of cable protected by uraduct or if the uraduct was only a temporary protection, a quotation for spares was inappropriate.
FAILURE AND REPAIR
- The weak link at the Lomond platform parted in a storm on 1 January 1995. The reasons for the failure were investigated by both Amoco and TCL. TCL's opinion was that the cable must have been damaged by third party impact. The original scope of work for the repair prepared by TCL/GPT dated 30 January envisaged reinstating the cable protected by uraduct as before. No rock dumping or mattressing was suggested. In the event and at Amoco's insistence the repair did not include uraduct but required rock dumping at the platform approaches. It was carried out in October 1995.
THE CLAIM
- Amoco submitted a warranty claim in February 1996. TCL's response in March asserted that "the scope of work specified by Amoco excluded the subsequent rock dumping of the CRP protected areas as had been proposed by GPT". Mr Berry said, without contradiction, that this was the first time TCL/GPT had made such a suggestion. It remains the foundation of its present defence. The claim was issued on 15 December 2000.
THE EXPERT EVIDENCE
- There was very little disagreement between the experts, both of whom (Mr Neilson for Amoco and Mr Lyngberg for TCL) were well qualified and experienced. In their Joint Memorandum they agreed that:
i) Dropped object protection generally required a cable to be covered by burial or rock dump. "Uraduct cladding provides a useful measure of protection against dropped objects where the cable is lying directly on the seabed or supported by grout bags".
ii) Anchor wire protection required the cable to be buried or rock dumped. Uraduct "would provide limited protection".
iii) Dragged trawl gear requires protection by trenching, rockdump or mattressing. "Uraduct does not provide any protection against fishing gear. However trawling in the immediate vicinity of the platform is an unlikely event."
iv) No (economical) physical barriers can protect against dragged anchors. Control of vessel operations is the best means of protection. Only construction vessels, such as flotels, are capable of anchoring in the water depth at the Lomond platform.
v) The cable parted at the weak link on 1 January 1995 due to the hydrodynamic loading caused by the storm that passed through the Lomond area. The cable became unstable so that the tensile forces in the cable exceeded the tensile capacity of the weak link.
vi) The use of uraduct on that part of the cable which was "free-spanning" from the end of the J-tube was not suitable for providing any effective protection against dropped objects.
vii) The uraduct cladding was not a suitable long-term means of protecting the cable because it actually reduced the on-bottom stability of the cable by reducing its specific gravity close to that of water. The Monel banding used to fix the uraduct was subject to corrosion and so would not have remained intact for the design life of the cable.
viii) Rock dumping and/or mattressing in the location close to the platform would have protected the cable and prevented the failure.
- The only point of disagreement was whether uraduct was adequate to achieve stability of the cable in the shorter term. Dr Lyndberg's opinion was that it was. Mr Neilson disagreed. Dr Lyndberg thought that the effect of the cable being subjected to hydrodynamic forces would be to cause it to lift and move and so reduce the tension in the cable and the effect of the forces. He therefore thought it was appropriate to model the effect of "significant" and not "maximum" wave heights to assess the stability of the cable. Mr Neilson considered the non-buried section of cable at Lomond to be short enough to require a maximum wave to be considered for stability design. In the event this difference of opinion is of no importance. It could only matter if Amoco needed to pursue a case that the system as installed was not fit even as a temporary protection for the cable.
THE ORAL EVIDENCE
- Both Mr Culpin and Mr Best professed a clear recollection of a meeting at which Amoco had objected forcibly to prices quoted by TCL for rock dumping the platform approaches. Such a meeting was not referred to at all by Mr Best in his witness statement and only by Mr Culpin in paragraph 8 of a second witness statement dated 11 November 2002 (a week before the trial began). In that statement Mr Culpin said the meeting had been with Mr Pinkerton and Mr Pinkerton had agreed that Amoco would itself carry out the rock dumping. Mr Culpin also said that he was sure that this had been minuted.
- I am quite satisfied that no such conversation took place at least in the context of a second rock dump. My reasons are that:
i) There are no minutes of it and a complete set of minutes is available. Mr Culpin accepted it would be in the minutes. Mr Best did not agree but I found that part of his evidence particularly unsatisfactory.
ii) Amoco did accept TCL's quote of rates for the second rock dump which could readily have been extended to further dumping at the platform approaches.
iii) Mr Culpin (and Mr Best) both acknowledged that Mr Pinkerton would not have been alone at such a meeting. Neither Mr Graham nor Mr Booty were even asked about it when they gave evidence.
iv) It is remarkable that both Mr Culpin and Mr Best should recall the meeting (albeit not when it took place or who was present) some 10 years later but, despite the obvious importance to the issues, not mention it in their statements.
v) Neither Mr Culpin nor Mr Best could begin to explain the lack of any reference to a further rock dump at any time before the failure or indeed for some months after it. Even had Amoco agreed to do it that failure is extraordinary: see paragraphs 38 to 41 and 44.
vi) There is a compelling explanation for such recollection as Mr Culpin and Mr Best do have. There is a strong inference that when the separation blanket rock dump was first discussed Amoco had concerns about cost which led to its decision to carry out the work itself: paragraph 21. I think the probability is that after so long a time both Mr Culpin and Mr Best are recalling facets of this meeting and wrongly putting them in the context of the second rock dump.
vii) Mr Culpin had also understandably forgotten that the use of uraduct as a temporary measure to protect against the flotel anchor chains had been agreed before the 8 and 18 September meetings. Both his and Mr Best's emphatically expressed belief that the temporary nature of all uraduct had always been clear was, I think, equally mistaken and probably derived from this memory lapse. As is agreed, there is no documented mention of double uraduct being temporary or of a need for further rock dumping after 18 September. Indeed the documents support Amoco's case that it was believed to be permanent.
viii) The events in relation to spares (paragraph 43) and the failure and proposed repair (paragraph 44) are also not reconcilable with Mr Culpin and Mr Best's evidence.
ix) I am quite confident that Amoco's witnesses were truthful in saying that far from believing or knowing that the protection installed was temporary they believed it was permanent. They are fully supported by the documents and the very fact that they took no steps to carry out any further protection before the cable failed.
THE SUBMISSIONS
- Mr Berry submitted Amoco had an unanswerable claim under Article 5.2. The cable failed within the warranty period and TCL was obliged to repair it. Further the failure was caused by a defect, namely the inadequacy of the uraduct to protect it from storms. The contract provided its own prescribed mechanism for variations (Article 11) and CVN 1 did not in any way vary TCL's obligations under Article 5.2. On this basis Mr Berry further submitted that the evidence on which Mr Allen for TCL sought to rely was inadmissible, but in any event led inexorably to the conclusions that there was no understanding let alone agreement that the use of uraduct was only a temporary protection pending rock dumping and mattressing, nor anything which could sensibly be described as an instruction by Amoco to TCL which put it out of TCL's power to carry out the work to TCL's design or in a manner contrary to TCL's obligations under the contract. Mr Berry readily acknowledged that if Amoco had instructed TCL not to complete its design or interfered with TCL's performance of the agreement then TCL might have defences to the claim. Mr Allen submitted that, on the evidence, that was what had occurred.
JUDGMENT
- I think Mr Berry is plainly right in both his major submissions.
- The contract was not varied in any significant respect. CVN 1 alone could qualify as such. But it refers to "completing" the platform approaches with the flotels on station. The obligations upon TCL were not referred to let alone varied: see paragraph 36. TCL remained under obligations to provide a system free from defects and suitable for its purpose and to repair it at its own cost if defects became apparent within 24 months from, in the event, January 1994.
- The evidence overwhelmingly supports Amoco's case that when it was agreed that double CRP would be used it was to be as a permanent protection in place of rock dumping and mattressing save for a length of unploughed and unprotected cable at Everest. In particular:
i) The 8 September meeting (as the minutes show) was called to address the problem of permanent protection with the flotels on station which would preclude rock dumping and mattressing. Temporary protection against anchor wires had already been agreed to be by single uraduct.
ii) Thereafter, and apart from the exposed length at Everest starting some 170m from the platform, there was no mention of any requirement for further protection.
iii) Had any further rock dumping been envisaged by anyone it would have been bound to have been raised before the second rock dump and in all probability included in it.
iv) Had TCL thought the installation provided only temporary protection it would and should have said so; it should not have quoted for spares as it did, and it would at once or at least readily have explained the failure on that basis. In fact the plain inference from the documents is that TCL positively did not believe further protection was required: paragraphs 40 and 44.
v) I reject the evidence of Mr Culpin and Mr Best summarised in paragraph 48 for the reasons stated in paragraph 49.
- The cable failed, as the experts agree, because it became unstable in the storm, and the uraduct was unsuitable to protect it, whereas rock dumping and mattressing would have done so. The want of protection was a defect in TCL's work; the defect became apparent in the warranty period and TCL was obliged to repair it at its own cost. That is more than sufficient to establish TCL's liability under Article 5.
- Amoco is therefore entitled to the agreed principal sum of £1,236,157. I will hear the parties on questions of interest and costs, if they cannot be agreed.
