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.

Link to Judgment

Counsel

Simon Hughes QC

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