Kópavogsbær wins arbitration against Rizzani de Eccher over Kársnesskóli construction delays

A recent ruling by an arbitration court has determined that Kópavogsbær, a municipality in Iceland, was within its rights to terminate a contract with the Italian construction company Rizzani de Eccher for the construction of the new Kársnesskóli school. The decision stemmed from significant delays in the project and issues with moisture and mold that became apparent during construction.

Kópavogsbær canceled the contract in May of last year after discovering extensive water damage and mold, which ultimately led to the evacuation and demolition of the previous school building in 2017. Rizzani de Eccher had entered into a contract to build the new school for 3.2 billion Icelandic koruna with the intention for it to be the first school in Iceland to achieve Swan certification.

However, the construction did not progress as planned. The arbitration court found that there were continuous and substantial delays, along with significant deviations in the quality of work, including moisture and mold problems that were deeply embedded and could only be rectified by demolishing parts of the building.

Moreover, the court ruled that the Italian contractor exhibited a lack of will and capacity to address persistent manpower shortages and rectify the defects, despite Kópavogsbær repeatedly demanding improvements. As a result, the municipality could not achieve satisfactory outcomes through less severe contractual remedies.

The court’s ruling was presented to Kópavogsbær’s council, where officials acknowledged that the municipality acted responsibly by terminating the contract, while one council member criticized the administration for not resolving the issues earlier. The completion of the new Kársnesskóli is now expected to be postponed by two years, with a projected opening within the next year, although the total construction costs remain unclear.