Court Battle Erupts Over Water Treatment Facility: Major Service Failure Sparks Contract Dispute Between MP Water and Veolia | LegalLink

CONTRACTSconstruction of contracts for the design and construction of a water treatment facility and the provision of services in relation to that facilityalleged breaches of contractsprevention principlescope of assistance required to be provided by services provider to principal exercising stepin right following “Major Service Failure”PRACTICE AND PROCEDUREplaintiff purported to withdraw certain claims for relief after judgment reserved following four day hearing

Court Battle Erupts Over Water Treatment Facility: Major Service Failure Sparks Contract Dispute Between MP Water and Veolia

2021-08-12 Hon. Justice WILLIAMS

Event and Time

Event Description

On May 13, 2021, MP Water issued a Step-In Notice to Veolia based on a failure of the Springvale Water Treatment Facility which occurred over a period of more than 48 hours beginning May 7, 2021.
The dispute revolves around whether Veolia breached the Services Provider Agreement (SPA) by failing to process and treat water and whether MP Water's own alleged breaches preclude it from claiming Veolia's default.

Application and Claims

MP Water (the plaintiff) seeks orders compelling Veolia (the defendant) to comply with the Step-In Notice under clause 44 of the SPA.
The claims are based on the contention that Veolia's failure constituted a Services Provider Default.
The parties dispute whether this failure was caused by MP Water's own breaches, thus invoking the prevention principle.

Judicial Decisions

The court reserved judgment following a four-day hearing, with a decision pending regarding the merits of the claims and the appropriateness of the Step-In Notice.

Dispute Points and Legal Basis

Dispute Points

MP Water's Claims:

Breach of Contract: Asserts that Veolia breached the SPA by failing to accept and process water for over 48 hours.
Right to Step-In Notice: Claimed entitlement under clause 44 to step in and require Veolia to perform necessary services, following the default.

Veolia's Arguments:

No Default: Contends that the failure to process water was not a breach as defined in the agreement.
Prevention Principle: Argues that any default on their part was a result of MP Water's own breaches, which should prevent MP Water from raising claims of default.
Consent to Withdraw Claims: Veolia did not consent to MP Water's attempt to withdraw certain claims after judgment was reserved, claiming fairness issues.