SSE Generation has won an appeal against contractor Hochtief over a tunnel collapse at its Gelndoe hydroelectric scheme in 2009 at the Inner House of the Court of Session.
The Court of Session in Edinburgh originally ruled that SSE’s claim had failed after the energy company took legal action to recover costs from repairs. The appeal overturns that decision.
The head race tunnel collapse occurred just months after the new hydroelectric facility near Fort Augustus opened in January 2009 and operations at the site did not resume until almost three years later.
Immediately following the collapse, the parties entered into discussions about rectifying the problem but they were unable to agree the scope and nature of the remedial works. More fundamentally, they disagreed about who bore the risk of the collapse. In the absence of agreement, SSE employed a joint venture of Bam Ritchies, Bam Nuttall and Wayss & Freytag to carry out the remedial works. The repairs took place between 2010 and 2012, taking longer and costing more than SSE anticipated.
Electricity generation did not restart until August 2012.
The issue around who was liable centred around the ground conditions at the location of the collapse, which was within the Conagleann Fault Zone. The presence of this fault zone was known before construction began and poor ground conditions were expected but not found. As a result Hochtief saw no reason to carry out any reinforcement work. Investigations concluded that the collapse was caused by insufficient support.
The initial court case failed as Hochtief was deemed to have exercised “reasonable skill and care” and the appeal was based on the question of whether the collapse of the tunnel was due to a defect which existed at handover.
Lord Glennie, one of three judges presiding over the appeal, said: “I consider that the collapse of the tunnel was indeed due to a defect existing at takeover. Further, I consider that that defect was not due to the contractor’s design of the works but rather to the implementation of that design.”
He added: “It follows from this, in my opinion, that the collapse of the tunnel was a contractor’s risk in terms of the contract; and the defenders are liable to the pursuers for the costs of repairing the tunnel. On that basis I would allow the reclaiming motion.”
SSE has said that it welcomes the ruling that awarded the company £107M for recovery costs and £1M in damages but Hochtief has not commented on the decision.
SSE wholesale director Martin Pibworth said: “SSE welcomes the positive decision of the Court of Session today concerning the tunnel collapse at our Glendoe Hydro Scheme near Fort Augustus.
“The Hydro Scheme had to be shut down for nearly three years while rectification works resulting from a defect which existed prior to take over of the scheme by SSE were carried out.
“Since its re-opening in 2012, Glendoe has been making an important contribution to Britain’s electricity supply.”