POL00031123
POL00031123
swestonntreoria Hong Kong 20 Printing Hevee, 18 lee House Strect, Central, Hong Kong “Telephone
., Q17MAR-1993 14:38 FROM BIRD & BIRD
Our Ref:
BIRD & BIRD
MEMORANDUM
Legally Privileged & Confidential
Your Ref
TO: Sarah Graham, DSS
cc: Vince Gaskell, BA
Nick Gray, Slaughter and May
Pat Kelsey, BA/POCL
Dave Miller, Horizon
Ron Powell, DSS Solicitors Branch
FROM: Hamish Sandison, Bird & Bird
DATE: 1 March 1999
RE: BA/POCL : PROJECT PLAN
Bd bi
90 Fetter Lane
London ECAA 1)?
_ Telephone
Telex
25501 Birds G
ox
119 London
Web Page
wwwwoblrds.com
1. You have asked for my advice on how best to protect the public sector
position, both specifically in relation to recent discussions with ICL Pathway on the
project plan and more generally in any discussions which might take place between
ICL Pathway and HM Treasury or other Government Department, My advice is set
out below.
2. ‘The first essential is of course to reply to John Bennett’s most recent
(February 25th) letter on the project plan. As in the past, my strong recommendation
is that our reply should be robust and comprehensive, setting out in one place a self-
contained and persuasive statement of the public sector position, not merely a formal
rebuttal for the record.
3. In my absence from the office, my partner Howard Rubin is briefed to settle a.
reply tomorrow with the parties concerned; based on a draft which he and I have
prepared over the weekend,
1 KAB\BPOCLIOONMEMOSGRAHAM GR waten®
EC Office 15 nue de la Lol, 1040 Brussels, Belglum Telephone {
01/03 '99 14:39 TX/RX NO. 2103
Iseanard
Cin vance
OCICeok
Imeyaget
MR Hote
Chonet
Al sanderion
HI Rubia
3 Baker
FR BtOwniow
tOMumee
FARere
1 Sere
PCDally -
RH Buterworh
NSP Biundll
RWhicet.
IPHerges®
A Nagas?
Chek
Consultants
KTCAmald
SNLChukoa
PjDim
RE Fewest
foto
‘snot a velichor
‘PAvoest registered
tn Brustels and Pans.
P02
POL00031123
POL00031123
: . Q1-MAR-1939 14:38 FROM. BIRD & BIRD P.@3/8S
4. Following my conversation with you today, I appreciate that there may be
reasons why you would wish the reply to be as conciliatory as possible, and J am very
happy for you and the others concemed - with Howard's advice - to soften the tone of
our initial draft. However, to protect the public sector position, I consider it vital that
the following points are made clear to ICL Pathway, in whatever language you and
your colleagues consider most appropriate for the occasion,
5. First, all discussions on the project plan have been and must continue to be
“without prejudice.” This means that the Authorities do not waive their rights and
remedies with respect to earlier project delays, particularly ICL Pathway's failure to
complete Operational Trial by the 21 November 1997 deadline which was agreed in
CCN105. .
6. Second, all project plans agreed on a working basis since CCN105 are
“Subject to Contract”, i.e., not contractually binding, unless and until formally agreed
in accordance with the change control procedures contained in the Related
Agreements.
7. ‘What this means in practical terms is that ICL Pathway has been working at its
own risk since it failed to achieve the last project plan which was formally agreed in
CCN105, and that the Authorities have no obligation to pay for work done since then.
8. Secondly, as well as replying to John Benneit along these lines, I think it is
essential that the same message is conveyed in any other communications with ICL
Pathway which are made by representatives of HM Treasury or other Government
Departments. In addition, it would be extremely helpful if these other representatives
could make clear that they are not speaking on behalf of the contracting authorities
(BA and POCL), and are not purporting to affect their contractual position.
9. Thope that this Memorandum is useful. I am happy to discuss - my secretary
knows how to reach me,
‘KABIBPOCLWOINMEMO\GRAHAM.MO7
01/03 '89 14:39 TX/RX NO. 2103 P03
eC
POL00031123
POL00031123
@j-MAR-1999 14:39 FROM BIRD @ BIRD P.84785
HXR/SIB
1 March 1999
DRAFT
Without Prejudice and Subject to Contract
‘Thank you for your letter of 25 February. I am disappointed - and somewhat puzzled.
that you should wish, at this point, to change the basis of our discussions that have
served us well over the life of the project to date,
As I read your letter, it would appear that you wish to establish that a contractually
binding project plan was agreed in correspondence following the Corbett discussions
of last year. This ignores, however, that those discussions were without prejudice to
the notice of breach of 24 November 1997 and were, in any event, by necessity subject
to contract. What this meant, as we have repeatedly made clear, is two things.: First,
by discussing a revised project plan, the Authorities did not waive any of their rights
and remedies with respect to earlier project-delays including in particular, ICL
Pathway’s failure to complete Operational Trial by the due date of 21 November 1997
(which was agreed in CCN105). Second, unless and until formally agreed in
accordance with our change'control procedures, any revised project plan arising from
these discussions is informal and not contractually binding. -
You also state that the DSS has unilaterally varied the multi-benefit testing
Programme. This is not the case, in the first place, for the reasons already explained,
the current testing programme has no contractual status. Secondly, quite apart from
that, and as pointed out in George’s earlier letter of 16 February, the failure to start
Model Office Testing by the promised date of December 1998, must mean that we
review the remainder of the testing programme, including the multi-benefit testing.
Continued..../
01/03 ‘99 14:39 TX/RX NO. 2103 P04
POL00031123
POL00031123
ae = Soe 2s SESS SST
_ ~ »BA-MAR-1993 14:33 FROM BIRD & BIRD © P,25785
_ » Tremendous progress has been made by all parties in moving towards a resolution of
. these matters. As you acknowledge in your letter this can only progress if matters are
to proceed on a “without prejudice” and “subject to contract” basis. I believe it is in
all our interests to establish an agreed and practicable basis for taking forward the day
to day work on the project, while discussions on the wider aspects of the project’s
future continue.
T hope you will consider that this is a constructive way forward and will agree to
resume our meeting on this basis.
Yours sincerely
- Dave Miller
ce: Vince Gaskell, BA Projéct Director
TOTAL P.O5
01/03 '99 14:39 TX/RX NO. 2103 POS
I