Scottish & Southern Electricity (SSE) v Hochtief Solutions AG

The Court of Session has found against Scottish & Southern Electricity (SSE) in a £130 million claim against the engineering contractor Hochtief Solutions AG over the collapse of a major tunnel at the Glendoe hydroelectric scheme.

Lord Woolman held that Hochtief was not liable for the collapse. However, Lord Woolman said that he was minded to award £1 million to SSE to reflect the period during which the electricity generation scheme was out of operation. 

The Glendoe scheme was the biggest one to be built in Scotland for many years. It began operating in January 2009. Seven months later, however, it ceased to generate electricity. SSE discovered that rock material had fallen into the tunnel over several months, leading to an almost complete blockage. 

SSE was losing substantial amounts of revenue while the scheme was out of commission. It asked Hochtief to carry out the remedial works. The two parties were, however, unable to reach agreement about who should pay for those works. 

In consequence, SSE instructed another engineering company to undertake the remedial works. They took much longer and cost far more than expected. The scheme did not begin to generate electricity again until August 2012. 

SSE sought to recover the £130 million costs involved in the remedial works from Hochtief. SSE relied on various provisions in the contract to try and establish liability.  

In its defence Hochtief contended that it had completed the works in accordance with the contract, and that SSE had assumed the risk of the collapse at takeover. 

Lord Woolman said that the collapse had occurred in a part of the tunnel that lay in a geological area known as the Conagleann Fault Zone (CFZ). All the engineering geologists had known about the CFZ before construction began. They expected to find poor rock conditions there. In fact they found none. As a result they saw no reason to reinforce the tunnel perimeter in that section. The collapse was caused by insufficient support. 

Having heard the evidence of a number of tunnelling experts, Lord Woolman stated: “I am satisfied that Hochtief did exercise reasonable skill and care. SSE’s case depends on the accumulation and interpretation of all the data that has been obtained since the collapse. Put short, it is founded on hindsight.” He decided that Hochtief was not liable. 

Lord Woolman said that the parties had agreed £1 million  as the ceiling figure for the lost income incurred by SSE, and that he was minded to award that sum. Lord Woolman also said that the cost of the recovery project was in the main reasonable. 

The full opinion can be accessed via the Scottish Courts and Tribunals Service website.

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