UKGH v DHSC – When Employer Conduct Prevents Performance: Prevention, Waiver and Estoppel
A recent decision of the Technology and Construction Court in UK Global Healthcare Ltd v Secretary of State for Health and Social Care [2026] EWHC 561 (TCC) highlights an important point that frequently arises in commercial and construction disputes: a party cannot insist upon strict compliance with contractual deadlines where its own conduct may have prevented performance.
The case arose out of contracts entered into during the early stages of the COVID-19 pandemic for the supply of medical gloves to the NHS. The judgment provides a useful reminder of how doctrines such as waiver, estoppel and the prevention principle can affect the enforcement of contractual deadlines, even where the contract contains strict “time of the essence”, “no waiver” and “no oral modification” provisions.
Background
In May and June 2020, the Department of Health and Social Care (DHSC) entered into two contracts with UK Global Healthcare Ltd (UKGH) for the supply of approximately 320 million nitrile examination gloves. The contracts required delivery in phases, with the first deliveries due by 30 June 2020. The contracts also expressly provided that time was of the essence, meaning that failure to meet the delivery dates would constitute a material breach.
Under the payment structure, DHSC paid £15.35 million upfront to the supplier. However, the gloves were never delivered. DHSC subsequently terminated the contracts and sought repayment of the advance payments. UKGH, on the other hand, contended that the failure to deliver had been caused by DHSC’s own conduct during the procurement process.
The dispute
The core dispute centred on additional testing and inspection requirements that arose after the contracts had already been signed. Shortly after entering into the contracts, DHSC requested further testing of the gloves, including laboratory testing to specific international standards. According to UKGH, these requirements were not part of the contractual specification, particularly in respect of the initial deliveries due by the end of June 2020. UKGH complied with the requests but warned that the additional testing would delay the delivery programme.
Correspondence between the parties indicated that the delivery dates would likely need to be varied to accommodate the additional testing process. In late June 2020, DHSC acknowledged in correspondence that it “made total sense” to amend the delivery dates to allow for further assurance regarding the quality of the gloves. Testing later carried out by a UK laboratory suggested that the gloves failed certain standards, and DHSC informed UKGH that the gloves would not be accepted. The contracts were eventually terminated in October 2020. DHSC then sought repayment of the advance payments on the basis that the gloves had never been delivered.
The court proceedings
DHSC applied to the court for summary judgment, arguing that the supplier had plainly failed to meet the contractual delivery deadlines and that the contracts entitled DHSC to recover the advance payments. UKGH resisted the application and argued that the case required a full trial because DHSC’s conduct had effectively prevented the deliveries from occurring within the contractual timeframe. The court therefore had to determine whether UKGH’s arguments had a real prospect of success, or whether the claim could be dismissed summarily.
The court’s analysis
The court refused to grant summary judgment. The key issue was whether DHSC’s conduct during the testing process had affected the contractual delivery obligations. The judge noted several important points. First, the contracts did not clearly provide a contractual entitlement for DHSC to require the additional pre-delivery testing that it had requested, particularly in relation to the initial deliveries due at the end of June 2020. Second, the contemporaneous correspondence between the parties suggested that both sides recognised that the additional testing would delay delivery and that new delivery dates would need to be agreed. Third, UKGH had complied with DHSC’s requests on the understanding that the delivery dates would be extended to reflect the additional testing requirements. On the evidence before the court, there was therefore a real prospect that UKGH could establish at trial that:
- DHSC had waived strict compliance with the original delivery dates, or
- DHSC was estopped from relying on those dates, or
- DHSC’s conduct had prevented performance, thereby engaging the prevention principle.
If any of those arguments succeeded at trial, DHSC would not be entitled to rely on the missed delivery deadlines to justify termination.
The prevention principle
A further argument raised by UKGH relied upon the well-known prevention principle, which provides that a party cannot insist upon performance of a contractual obligation where that party has itself prevented performance. The court accepted that there was at least a triable issue that DHSC’s additional testing requirements may have made it impossible for UKGH to meet the original delivery dates. In those circumstances, the delivery deadlines might no longer be enforceable in the way DHSC asserted.
Repayment of the advance payment
DHSC also relied on a contractual clause requiring the supplier to repay advance payments for goods that had not been delivered before termination or expiry of the contract. However, the court held that there was a realistic argument that the clause could not be interpreted so as to allow DHSC to recover the advance payment if DHSC’s own conduct had caused the non-delivery. Applying the principle that a contract should not ordinarily allow a party to benefit from its own breach, the court held that this issue also required determination at trial.
Decision
The court therefore dismissed DHSC’s application for summary judgment. UKGH’s claim will proceed to a full trial where the issues of waiver, estoppel, prevention and termination will be determined in detail.
Practical implications
Although this dispute arose in the context of pandemic procurement, the decision contains lessons that are highly relevant to construction and engineering contracts. In practice, projects often involve requests for additional testing, inspections, approvals or documentation that were not originally required by the contract. Where those requests affect the contractor’s ability to meet programme milestones, the employer may inadvertently create arguments based on waiver, estoppel or prevention. This case demonstrates that even where a contract contains:
- strict “time of the essence” provisions
- no oral modification clauses, and
- no waiver clauses
the conduct of the parties during performance can still affect how those provisions operate in practice. The judgment also reinforces the importance of clearly documenting any changes to delivery dates, inspection requirements or programme obligations before they begin to affect contractual performance.
How CCC can help
Disputes concerning delay, termination, payment recovery and contractual interpretation are common across construction and engineering projects. Our team regularly assists contractors, subcontractors and employers in analysing contractual obligations, assessing entitlement to extensions of time and defending or pursuing claims arising from alleged breach of contract. If you are dealing with issues involving termination, delayed deliveries, disputed testing requirements or recovery of advance payments, early legal and commercial advice can be critical to protecting your position and avoiding costly disputes.
