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Huge Conveyor System ‘Forms Part of the Land’

In a guideline decision, the High Court has ordered enforcement of an adjudicator’s award on the basis that a kilometre-long conveyor system had a sufficient degree of permanency to render its installation a ‘construction operation’ within the meaning of the Housing Grants, Construction and Regeneration Act 1996.

Company A, a distributor of office supplies, had contracted company B to install the automated system in one of its warehouses. The contract price was more than £2.3 million; however, much of that had remained unpaid due to company A’s complaints about the system’s quality and performance. Company B had ultimately referred the dispute to an adjudicator, who ordered company A to pay almost £890,000.

Company A argued that the adjudicator had no jurisdiction to rule on the matter in that the system’s installation was not a construction operation. In upholding company B’s case, however, the Court noted the system’s enormous size and the fact that it was secured to the warehouse’s concrete floor by thousands of steel bolts. In the circumstances, the system was properly viewed as ‘forming part of the land’.