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The Scottish Court decision in SGL Carbon Fibres v RBG Ltd [2012] is useful for those advising on and operating NEC3 contracts for two reasons:-

1. It is one of very few judgments which actually deals with the meaning of some of the NEC provisions (beyond the adjudication clauses); and
2. It is an acknowledgement and a reminder of the principle that the employer, as well as the contractor, can take to dispute any decision or certificate of the project manager (even where the project manager is an employee of the employer).

In fact the argument in this case, in 鈥渁 legal error appeal鈥� (under the new Scottish Arbitration Act 2010), was which party had the burden of proving what the project manager鈥檚 certificate should have been when the employer was alleging it was too high?

SGL, the employer, was looking for repayment of sums it maintained it had overpaid the contractor at interim assessment stage. SGL argued that when the price for work done to date was being challenged, it was up to the contractor to prove the value. RBG said it was up to the employer to prove an entitlement to be repaid. The judge upheld the arbitrator鈥檚 opinion that the burden lay, initially at least, with SGL - 鈥渉e who asserts, proves鈥�.

It is worth noting that the payment mechanism here had not been operated strictly in accordance with contract. As is often the case, an agreed process had evolved whereby the employer and contractor鈥檚 quantity surveyors met each month; agreed the valuation and SGL paid that amount. The project manager did not play any significant part in this.

RBG tried to argue this meant such valuations were agreed and could not later be re-visited. The arbitrator did not consider this altered the payment mechanism or constituted a binding agreement. The burden still lay with SGL to prove an overpayment. A timely reminder of the implications and otherwise of interim assessments and the fact that generally they are valid until proved otherwise.