Supplier of façades successful in arbitration proceedings against large hotel
23 December 2016
A leading supplier of façades faced a claim for a reduction/damages of more than DKK 75 million by a large Danish hotel. The matter has now been settled by an arbitration tribunal in favour of the supplier of façades that is only to pay about DKK 7 million whereas the hotel was ordered to pay all legal costs relating to the arbitration tribunal's hearing of the matter. Plesner represented the supplier of the façades in the case.
The company supplied and fitted the façade elements for a large hotel in Denmark about five years ago. A dispute subsequently arouse because the hotel was of the opinion that the supplier of the façades had caused some water damage and because the façade elements did not provide as much insulation as they should. As a consequence, the hotel refused to pay the outstanding contract price and a number of additional works in the amount of DKK 6,000,000. The supplier of the façades brought the issue before an arbitration tribunal and it has now been successful in its claim in all material respects.
The hotel raised several counterclaims against the supplier of the façades. The most important claim was for an amount of DKK 70 million as a discretionary reduction in the contract price due to the insulating property of the supplied façade elements being too low as well as a claim for damages of DKK 2.7 million for the additional costs paid by the hotel in respect of heating in the period up to the arbitration proceedings. The arbitration tribunal found that the hotel's claim for a reduction and damages amounted to DKK 6 million, only a fraction of the hotel's claim.
The arbitration tribunal found that during the construction period the hotel was particularly exposed to rainfall due to the special geometry of the hotel and the construction progress that had been decided on. The project did not take such risk properly into account and several of the measures that had been planned to alleviate the risk of damage due to rainfall had not been taken.
Even though the water damage was partly caused by the supplier of the façades, the arbitration tribunal ordered the hotel to pay three-quarters of the water damage costs itself.
The supplier of the façades was awarded DKK 1,000,000 in legal fees and the hotel was ordered to pay all costs relating to the arbitration tribunal's hearing of the matter.
Attorney and Plesner Partner Peter Wengler-Jørgensen and Senior Attorney Mikael Delin represented the supplier of the façades in the arbitration proceedings.
The hotel raised several counterclaims against the supplier of the façades. The most important claim was for an amount of DKK 70 million as a discretionary reduction in the contract price due to the insulating property of the supplied façade elements being too low as well as a claim for damages of DKK 2.7 million for the additional costs paid by the hotel in respect of heating in the period up to the arbitration proceedings. The arbitration tribunal found that the hotel's claim for a reduction and damages amounted to DKK 6 million, only a fraction of the hotel's claim.
The arbitration tribunal found that during the construction period the hotel was particularly exposed to rainfall due to the special geometry of the hotel and the construction progress that had been decided on. The project did not take such risk properly into account and several of the measures that had been planned to alleviate the risk of damage due to rainfall had not been taken.
Even though the water damage was partly caused by the supplier of the façades, the arbitration tribunal ordered the hotel to pay three-quarters of the water damage costs itself.
The supplier of the façades was awarded DKK 1,000,000 in legal fees and the hotel was ordered to pay all costs relating to the arbitration tribunal's hearing of the matter.
Attorney and Plesner Partner Peter Wengler-Jørgensen and Senior Attorney Mikael Delin represented the supplier of the façades in the arbitration proceedings.
