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Local authority ordered to pay more than £800,000 to waste business in contract dispute

Buckinghamshire Council must pay waste contractor FCC £812,633, the Technology and Construction Court has ruled.

Mrs Justice O’Farrell said in Buckinghamshire Council v FCC Buckinghamshire Ltd [2021] EWHC 2867 (TCC) that FCC was entitled to the money for overpaid third party income with interest, under a contract that runs until 2046 for an energy-to-waste plant at Lower Greatmoor Farm.

Buckinghamshire sends some 100,000 tonnes a year of waste there, with the remainder of the plant’s 300,000 tonnes capacity made up from material sent by other waste authorities or companies.

The dispute centred on how income derived from such ‘third party’ waste was treated.

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A formula in the contract governs the calculation of how such third party income should be shared between the council and FCC.

According to the council, agreements to handle the waste between FCC Waste Services and FCC Recycling were third party waste contracts and so income from them was subject to the contract’s sharing arrangements. This was despite both parties in these deals being parts of FCC.

But FCC argued successfully that third party income was limited to gate fee income at its plant and this did not extend to income received from waste suppliers elsewhere or for transporting waste to Lower Greatmoor Farm.

Buckinghamshire succeeded in its argument that certain contracts entered into by FCC Waste Services were third party ones and so the income from these should shared according to the contract.

The council also succeeded in its demand for certain commercial information to be handed over to it by FCC.

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