Pipework contractor taken to court over ‘water contamination’

Pipework subcontractor Electrosteel Castings UK is being taken to court by Caledonia Water Alliance – a joint venture comprising Morrison Water Services Ltd and Aecom Ltd -over alleged breaches of a contract that it says led to the contamination of drinking water.

Details of the case emerged this week after Derbyshire-based Electrosteel lost its bid to transfer a £35m damages case over water contamination from the Scottish to the English courts. A judge at Scotland’s Inner House of the Court of Session upheld the decision of a lower court and the case will remain under the jurisdiction of the Scottish courts.

Under an alliance agreement, Caledonia was contracted in 2015 to design and install water pipes for the South Edinburgh Resilience Scheme for Scottish Water.

Over four years, Caledonia entered into 60 separate contracts with Electrosteel for the supply of substantial quantities of ductile iron pipe for use in the project, the court heard.

The pipeline was completed, but Caledonia alleges that deficiencies in Electrosteel’s product led to contamination of the drinking water carried.

“Caledonia states that because of this it is in breach of its contract with Scottish Water,” the judge, Lord Malcolm, said.

“The current action is based on the proposition that since Electrosteel is in breach of its contracts with Caledonia, it should indemnify Caledonia in respect of its liabilities for using defective pipework in the project.”

Electrosteel argued the contracts concerned were subject to the exclusive jurisdiction of the English courts.

However, Caledonia contended that the contracts were subject to the standard terms and conditions set out in the framework agreement between Scottish Water and Electrosteel, giving exclusive jurisdiction to the Scottish courts.

“The commercial judge, after proof, held that it was clear that supplies would be made in the context of Scottish Water’s framework arrangements,” Lord Malcolm said.

“There was more than sufficient evidence to justify the conclusion that the parties did not intend either of their standard terms and conditions to apply. It is plain that each would have understood that the other was adopting the framework arrangements.

“The result is that we affirm that the Scottish courts have jurisdiction over the parties’ dispute.”