Read the full judgment text of HCCT000009/1997 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 19 September 1997 before The Hon. Mr. Justice Barnett.
Construction law — remeasurement contracts — Adjustment Item (AI) in Bills of Quantities — inclusion of AI adjustments in Effective Value for contract price fluctuations — interpretation of GCC clauses 79 and 89 as amended by SCC 23 and GP 10 — whether negative AI is excluded under GP 10(E) — contract drafting and construction — arbitration award and appeal. The contractor included an Adjustment Item reducing its tender price, accepted by the Government. A dispute arose over whether negative AI should be included in the calculation of Effective Value affecting price fluctuations. The arbitrator held AI generally included but excluded negative AI, interpreting 'payable' narrowly. On appeal, the High Court held the contractual provisions are clear and mutual explanatory, requiring inclusion of AI within Effective Value, with no exclusion of negative AI. The court found the arbitrator erred in his interpretation of 'payable' and remitted the award for reconsideration. Respondent ordered to pay costs of the appeal.
Legal issues: Whether interim adjustments referable to Adjustment Item form part of Effective Value for contract price fluctuations · Whether negative Adjustment Items are excluded from calculation of Effective Value under GP 10(E)
Outcome: Appeal allowed; arbitrator's ruling excluding negative AI from Effective Value reversed; matter remitted to arbitrator for further determination.