Alstom Power Limited v Somi Impianti SRL
Citation: EWHC 2644 (TCC) (vesting clauses in terms of plant brought to site)
Nature of case:
Alstom, the main contractor on construction of a power plant, engaged Somi as sub-contractor. Under the terms of the sub-contract, all of Somi’s property when on site was deemed to be the property of Alstom. Other terms of the sub-contract provided: that goods supplied pursuant to the sub-contract would become the contractor’s property when they were delivered to the site; that, in the event of termination of the sub-contract, the contractor could take possession of such equipment on the site which was reasonably required to complete the work; and that the contractor could sell such equipment and use the proceeds to satisfy any debt if the sub-contract was terminated. The issue was, following Somi’s liquidation, whether these terms had the effect of transferring ownership in Somi’s property to Alstom.
Akenhead J held that, on a proper construction of the contract, Somi’s property was not permanently transferred to Alstom; Alstom had possessory rights over Somi’s property until the work was completed, but not thereafter.