The recent Technology and Construction Court decision in BioConstruct v Grays Thurrock Properties [2025] EWHC 3143 (TCC) will be of particular interest to working on contracts that operate with stage or milestone-based payment structures.
This particular dispute arose in connection with a project for the construction of an anaerobic digestion plant in Kent. BioConstruct Ltd was engaged by Grays Thurrock Properties Ltd under a subcontract that provided for payment by reference to fourteen defined milestones. The later milestones were linked to performance testing, steady state operation and formal take-over.
Milestone 14 was the key payment trigger in dispute. It was tied to successful Take-Over, which in turn depended on the plant achieving steady state operation for a defined period and completing take-over testing. Two further milestones dealt with rectification obligations following take-over.
BioConstruct maintained that the plant met the relevant performance and testing criteria in early 2020 and that take-over should have been certified. On that basis, it said a substantial stage payment remained outstanding. Grays Thurrock Properties disagreed, contending that the milestone conditions had not been satisfied and that no payment was therefore due.
At the heart of the dispute was how the milestone wording operated in practice. The subcontract required the plant to achieve steady state operation for 18 days “immediately preceding” the start of take-over testing. In reality, the testing and commissioning programme did not run in a perfectly linear way, and there was a gap between the steady state testing period and the take-over tests.
The employer argued that this gap meant the milestone could never be achieved as drafted. BioConstruct, by contrast, argued that the milestone wording had to be read in a practical, commercial context. It said that “immediately preceding” did not require an uninterrupted sequence with no gap at all, but rather that the testing occurred with reasonable continuity having regard to the realities of commissioning a complex biological process plant.
The Court accepted that this was a realistic and arguable interpretation of the milestone wording. Importantly, the Court did not decide whose interpretation was correct at this stage. Instead, it recognised that the meaning and application of the milestone depended on evidence about how the plant was tested, how commissioning progressed, and how the parties operated the contract in practice. That would require full consideration by the court.
The same applied to the other milestone-related issues raised in the case. Whether the correct feedstock was used, whether steady state operation was in fact achieved, and whether the required documentation had been provided were all matters going directly to whether the stage payment conditions had been satisfied. These were not issues that could be resolved simply by reading the contract in isolation; they required technical and factual evidence.
For those working in the construction industry, the practical lessons are clear. When using stage and milestone payments, the drafting of the contract and practical application of that drafting is critical. Seemingly simple phrases can take on significant importance once reality departs from the process envisaged at contract stage.
The case shows that courts recognise the commercial and technical realities of complex projects. This decision also highlights the risk of overly rigid milestone drafting. If payment depends on certain steps lining up perfectly in time, even minor programme changes can be used to argue that a milestone has not been achieved, potentially leading to protracted disputes and cash flow pressure for contractors.
From a practical perspective, contractors and subcontractors should ensure requirements tied to stage payments are clearly understood, carefully recorded and consistently communicated. Employers and developers, meanwhile, should consider whether milestone wording genuinely reflects how things are expected to operate on site, rather than assuming a level of precision that may not be achievable in practice.
Ultimately, the case is a reminder that stage payments are not just a contractual formality. On complex projects, they can bring issues of contract drafting, programme management and real-world performance into sharp focus. Getting the balance of these issues wrong can have significant commercial consequences for all involved.
If your project uses stage or milestone payments it is worth checking that the payment triggers and evidence requirements are clear and workable in practice. A short review of the wording and the planned testing approach at an early stage can help reduce the risk of payment disputes later on.
How CCC can help
Disputes over stage and milestone payments often turn on a detailed analysis of contract wording, programme sequencing and what actually happened on site. CCC regularly supports contractors and subcontractors in navigating these issues as well as wider disputes that typically arise on construction projects. By combining contractual analysis with a practical understanding of how projects operate on site, CCC helps clients protect cash flow, reduce dispute exposure and, where necessary, pursue claims with confidence.
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