Energy Disputes – spotlight on Operation – addressing defects

Addressing defects is the focus of today's spotlight on our Energy Disputes Guide. A failure of an asset of key plant failing to achieve the specified guaranteed performance output is a key consideration on any energy project as it will usually have an adverse impact on generation and revenue. Defects in the works is one of the key reasons we see for such failures arising. To avoid and mitigate disputes:

• Be aware of the parties' respective rights and obligations during relevant defect liability periods. Remember that under many contracts, a contractor will typically remain liable for defects discovered after the expiry of a defect liability period.
• Maintain adequate monitoring and reporting for the identification of defects at an early stage.
• Be clear if, and how, defects can be addressed under the O&M arrangements to minimise disruption to plant operations.