Navigating contractual risk: Mace v Baltic

In Mace Construct Limited v Baltic Investment Holdings Limited [2026] EWHC 976 (TCC), the Technology and Construction Court provided important guidance on interpreting complex construction JCT contracts, and on defining the scope of an adjudicator’s powers when reviewing extensions of time. The Judge considered requests for declarations arising from the major refurbishment of the Baltic Exchange Building at 38 St Mary Axe, London.

Background

The dispute centred on contractual interpretation of an amended JCT Design and Build Contract 2016. The contract was signed on 15 December 2023. However, in December 2024, an agent acting for the employer, Baltic Investment Holdings Limited (“Baltic”) granted its contractor, Mace Construct Limited (“Mace”) extensions of time (“EOT”) which totalled nearly 8 weeks for three delay events. It was claimed that the delay was caused by changes to the design and also from the need to obtain further planning approvals and listed building consents. It was claimed that this was not Mace’s responsibility under the contract.

Baltic subsequently challenged the EOT in an adjudication, where the Adjudicator reviewed the extension and reduced it to zero.

Mace subsequently initiated Part 8 court proceedings seeking declarations on contract construction, design liability, planning risk, and whether an adjudicator has the legal power to reduce a previously granted prospective extension of time.

Judicial findings

Legal Background

The parties were in agreement as to the relevant principles of contractual interpretation and the judge therefore proceeded on that basis. The agreed principles were:

The meaning of the contract is to be determined as at 15 December 2023 being the date of execution
The interpretation exercise requires ascertaining the meaning of the language used and the objective intention of the parties as a whole
Effect must be given to all parts of the contract such that no provision is treated as inoperative
The interpretation exercise begins from the presumption that parties intended provisions to affect the parties’ rights and obligations under the contract
Greater weight should be given to special conditions than standard form provisions

Declarations 1 & 2 (Incorporation of documents)

Mace sought formal declarations that the Tender Clarifications and Schedule of Derogations were incorporated into the contract. Baltic accepted their incorporation as part of the contract, but its Counsel argued that the declarations were unnecessary. The Judge disagreed and considered that identifying the documents forming the contract is the essential starting point for determining the parties’ rights.

Declarations 3, 4 and 5 (Design Responsibility and Derogations)

The Schedule of Derogations included a section that stated that once the derogations had been concluded and approval from all parties obtained, and formal instruction has been received then Mace will take all design responsibility for the items listed in the Schedule of Derogations.

Mace sought a declaration that the Schedule of Derogations and Tender Clarifications would not be superseded or overwritten by the Amended JCT terms and that they have to be given effect as part of the contract as a whole. Mace argued that they were to not take on any design responsibility or any associated risks for discrepancies, inconsistencies or inadequacies from derogation items identified in the Schedule of Derogations. Mace argued that they did not have liability until instructions and approval had been received.

Baltic contended Mace assumed full and unqualified design liability after the period of initial design development under the contract expired on 2 February 2024 regardless of whether instructions were issued.

Baltic argued that Clause 1.3 of the Contract (containing standard “override or modify” language) meant standard JCT terms took precedence over the Schedule of Derogations. The court rejected this, reiterating that contracts must be read as a whole so that no provision is rendered inoperative. The Schedule of Derogations should not be rendered inoperative. Further, it was not suggested that the Schedule of Derogations would override the JCT terms and the Schedule of Derogations did not modify the terms; rather, it clarified and supplemented how Mace was to perform its design duties for specified items. Because the derogation provisions set out that formal employer instructions were required before design transfer took effect, Mace was protected from premature design liability. Declarations 3, 4 and 5 were granted.

Declaration 6: Local Authority consents

Mace sought a declaration that it did not take on any risks which were caused by delays with the local authorities in granting planning permissions, approvals, or consents which were not reasonably foreseeable at the date of contract, and which they had taken all practicable steps to avoid.

The court considered that the contractual provisions on this issue were muddled. However, fundamentally, the court held that any issues with consents provided by local authorities would be heavily fact-sensitive and therefore it would not be appropriate to grant a declaration. The Judge also considered that he would either be restating express contractual provisions or venturing into complex factual territory and a declaration would therefore not be needed or not be appropriate. Declaration 6 was not upheld.

Declaration 7: Scope of Adjudicator Powers Over Extensions of Time

Mace sought a declaration that both the adjudicator and the court did not have the power to retrospectively fix an earlier completion date than that which had been fixed by an Employer’s agent.

Mace argued that because JCT Clause 2.25 prohibits an Employer from retrospectively reducing an extension of time (except for Relevant Omissions), an adjudicator or the court similarly could not reduce a prospectively granted EOT as they would never be in the position to carry out the prospective analysis and would always be looking at the matter retrospectively.

The court acknowledged that an EOT could not be granted retrospectively but instead considered that the correct approach was for an adjudicator to “stand in the shoes” of an Employer or Agent acting under clause 2.25.1. While the court accepted that it may be difficult for an adjudicator to consider the matter prospectively as the Employer did, the court did not accept that this difficulty affected the principle that the adjudicator can review an EOT. The court considered that this was a matter for the adjudicator to consider as to the procedure taken and the declaration was refused.

Conclusion

The ruling in Mace v Baltic serves as a reminder regarding contractual drafting. The judgment underscores the necessity for clear wording to prevent issues arising down the line. Crucially, the decision cements the broad statutory scope of adjudication; an interim extension of time granted mid-project is never permanently locked in, and adjudicators retain full authority to re-evaluate and reduce those extensions when called upon to resolve a dispute.

If you would like help with similar contractual disputes, or have any questions, please contact a member of our construction, engineering and infrastructure disputes team.

Contributors: