Attorney General of the Virgin Islands v Global Water Associates Ltd [2020]

Attorney General of the Virgin Islands v Global Water Associates Ltd [2020] UKPC 18 involved a contractual dispute between the Government of the British Virgin Islands and Global Water Associates Ltd (GWA) regarding the construction and operation of a water reclamation treatment plant. The Privy Council considered the issue of damages and remoteness of damage in contract.

The Design Build Agreement (DBA) for the construction of the water reclamation treatment plant and the Management, Operation, and Maintenance Agreement (MOMA) for GWA to operate the plant for a period of 12 years. The Government's failure to provide a prepared project site led to GWA's termination of the DBA and a subsequent claim for damages, seeking the profits it would have earned under the MOMA.

The arbitration process and lower court decisions played a crucial role in shaping the legal landscape of the case. Initially, the arbitrators found that the damages claimed were too remote to be recoverable. The High Court in the BVI, however, sided with GWA's argument, stating that the damages were not too remote, and remitted the award to the arbitrators for reassessment. The BVI Court of Appeal, in contrast, allowed the Government’s appeal, prompting GWA to appeal to the Privy Council.

The Privy Council allowed GWA’s appeal, aligning with the High Court's view that there was an error of law in the arbitrators' decision regarding the claim for damages. Lord Hodge, who delivered the judgment, meticulously considered established principles on the remoteness of damage in contract, referencing significant cases such as Hadley v Baxendale [1854], Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949], and C Czarnikow Ltd v Koufos [1969].

Several principles were derived from the analysis, emphasising that damages for breach of contract aim to restore the innocent party to the position they would have been in if the contract had been performed. Recoverable damages are confined to losses reasonably contemplated as a serious possibility at the time the contract was made. The test is objective, focusing on what the defendant must be taken to have had in contemplation at the time of contracting, and the criterion is factual, considering what the defendant must be taken to have contemplated as a result of a breach.

Applying these principles to the case, the Privy Council concluded that losses resulting from the inability to earn profits under the MOMA were within the reasonable contemplation of the parties when they entered into the DBA. The interrelation of the contracts, entered into on the same day and relating to the same plant, underscored the foreseeability of such losses. The attempt by the arbitrators to distinguish Victoria Laundry was deemed untenable, reinforcing the interconnected nature of the contracts.

In essence, the decision clarified fundamental principles of the remoteness of damage in contract and underscored that damages for the loss of profits under one contract may be recoverable for the breach of another contract if it was within the reasonable contemplation of the parties at the time of contracting.
Back to blog

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Yale University
Council of Europe
Baker Mckenzie 
University of Chicago
Columbia University
New York University
University of Michigan 
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law


    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory


    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.