An arbitration panel in the UK has ruled in favour of an offshore wind farm joint venture company in a legal case brought by engineering giant Fluor.
Fluor says it will take a $400 million pre-tax hit in the fourth quarter after the arbitration panel said that it did not have a claim against Greater Gabbard Offshore Wind Limited (GGOW).
Fluor had submitted a £300 million claim against GGOW – a 50/50 joint venture between Scottish & Southern Energy (SSE) and RWE – as compensation for delays and related costs incurred during the construction of the 500 MW Greater Gabbard offshore wind farm.
GGOW hired Fluor as the main contractor for the project but notified it in 2011 that some of the foundations did not meet contracted standards. Fluor claimed that it should not have been liable for the delays and costs that arose as a result of testing and repairs carried out at the site.
The case centred around 52 upper foundations and 35 lower foundations. Fluor claimed that there was a design change that led to a change in specification and it should therefore be compensated.
“Fluor delivered a quality project, and we are extremely disappointed with this unexpected decision, especially considering recent statements that acknowledge that all 140 turbines are commissioned and exporting electricity, and the overall performance is more than ten per cent ahead of the client’s expectations,” said Fluor’s chairman and chief executive officer David Seaton.
SSE announced in September 2012 that all 140 turbines at the Greater Gabbard site in the Thames Estuary had been commissioned.
GGOW has launched a separate claim against Fluor in relation to the project, although no resolution is expected on that case until next year.
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