Pharos Offshore Group Limited v Keynvor Morlift Limited: Marine contracting obligations and external factors

In Pharos Offshore Group Limited v Keynvor Morlift Limited ([2025] EWHC 1764 (TCC)), delivered on 11 July 2025, the Technology and Construction Court addressed complex contractual obligations arising from marine contracting services for the Viking Link project. The case centred on the burial of electrical and fibre optic cables beneath the seabed off Denmark's west coast, part of the world's longest land and subsea electricity cable connecting the UK and Denmark.

Pharos Offshore, as claimant, provided jet trenching equipment and personnel to Keynvor Morlift (KML), which operated as marine contractor for Prysmian Powerlink Srl. The dispute emerged when delays affected the mobilisation of essential machinery—the UTV-670—raising questions about weather conditions and seabed suitability that impacted project timelines.

Contractual obligations and timing disputes

The central issue concerned when Pharos was contractually obliged to mobilise equipment and whether a fixed commencement date existed. KML argued that a binding date was established on 9 June 2022. However, equipment delivery experienced significant delays due to customs clearance issues, compounded by adverse weather conditions during June and July.

The court examined factual evidence from witnesses and expert opinions on trenching operations and downtime causes. Whilst Pharos encountered substantive delays, the court found that considerable downtime was attributable to weather conditions, absolving Pharos of certain liabilities.

Assessment of damages and liquidated damages claims

The court scrutinised KML's claims for liquidated damages arising from delays. The judgement ruled that claimed delays were not sufficiently linked to a contractual timeframe that Pharos had violated. The overall obligation rested upon reasonable efforts to perform the Embedment Works in a timely manner, as established in original contract discussions.

The concept of an "indicative programme" proved central to the assessment, emphasising that both parties must operate within reasonable expectations whilst accommodating unforeseen complications. This approach reflects the court's recognition that marine construction projects face inherent uncertainties beyond parties' control.

Financial implications and settlements

Both parties presented invoices and expenses related to the project, which formed part of the damages assessment. The court concluded that Pharos was entitled to payment for services rendered, whilst KML's counterclaim for damages—principally due to delays—had some merit. The court awarded KML a sum based on culpable delays attributed to both parties, reflecting a balanced approach to shared responsibility.

Implications for marine contracting

This judgement establishes important precedents for contractual obligations in marine contracting, particularly regarding the interplay between contractual timelines and external factors. The decision emphasises that parties must maintain reasonable expectations when external circumstances beyond their control affect project performance.

The ruling highlights the necessity for clear contractual terms regarding timelines, responsibilities, and project conditions. The court's balanced approach to apportioning responsibility between contractual delays and external factors provides valuable guidance for similar disputes.

The judgement reinforces that contractual relationships in large construction projects, particularly in marine environments, require careful consideration of external variables. Weather conditions, customs procedures, and other unforeseen circumstances can significantly impact project delivery, and contracts must reflect these realities.

The decision's emphasis on reasonable efforts and indicative programmes rather than rigid timeframes suggests a practical approach to managing complex marine projects. This precedent will likely influence how parties structure future contracts and manage expectations in similar international infrastructure projects.