During construction
Infrastructure and resources company Aveng plans to seek damages from Legacy Group, after it moved to terminate Aveng’s contract for the construction of a building that will be Africa’s tallest.
In early January, the company revealed that it had received a notice purporting to terminate the contract for the construction of the building in Sandton, from Seventy Five on Maude, which is part of Bart Dorrestein’s Legacy Group.
Aveng entered into the contract to build the Leonardo in October 2015.
Along with terminating the contract, Legacy Group has made a call on the R87.4-million construction guarantee, procured by Aveng as part of the contract.
However, Aveng’s position was that the grounds for termination relied on by Legacy Group were “incorrect, inaccurate and ill-conceived”, and, accordingly, had denied these.
Aveng CEO Sean Flanagan told Engineering News & Mining Weekly that some of the accusations levelled against Aveng by the client in its letter of termination were factually incorrect.
He pointed out that Aveng was of the view that Legacy Group was itself in material breach of the contact, which precluded the possibility of a valid termination.
Thus, Aveng said, the actions taken by Legacy Group amounted to “a clear repudiation of the contract”.
It had accepted the repudiation and, as a result, had consequently terminated the contact on that basis.
The company intended to recover damages resulting from the repudiation.
Aveng noted that the project had suffered delays, the responsibility and consequence of which were the subject of various disputes, dealt with in terms of the agreed dispute resolution mechanisms.
Speaking to Engineering News & Mining Weekly this month, Flanagan said there were a number of matters relating to the contract that were subject to dispute resolution processes and that these would, ultimately, take their course.
He indicated that the matter of whether the employer was correct in moving to terminate the contract, or whether Aveng was correct in construing this course of actrion as a repudiation, would also be decided by the dispute resolution process.
He further noted that the rest of Aveng’s options in the context of the contract and the client giving notice that it intended to pull the bond were matters Aveng was still discussing with its legal team.
At the time of publication, attempts to secure comment from Legacy on the matter proved unsuccessful.