The Law Debenture Trust Corporation Plc v Elektrim SA & Anor (Rev 1)

The Law Debenture Trust Corporation Plc v Elektrim SA & Anor (Rev 1)

Condition 6(k) of the Trust Deed imposed an obligation on Elektrim to operate the machinery for the Contingent Payment regardless of whether the bonds were redeemed by the Repayment Maturity Date. Elektrim's failure to do so was a breach of contract. The Trustee is entitled to damages for loss of a chance to receive the Contingent Payment, assessed by reference to the fair market value of Elektrim's assets as at 11 July 2006. Estoppel and rectification would also have been available if necessary. Res judicata does not bar the Trustee's alternative claim as the cause of action had not arisen at the time of the prior proceedings.

Parties
Claimant: The Law Debenture Trust Corporation PLC; First Defendant: Elektrim S.A.; Second Defendant / Interested Party: Concord Trust
Jurisdiction
England and Wales
Judgment Date
20 July 2009
Procedural Posture
Civil (commercial/contract) / Judgment After Trial
Outcome
Judgment for the Claimant (Trustee) against Elektrim S.A.
Legal Topics
Breach of Contract, Trust Deeds, Eurobonds, Damages for Loss of Chance, Interpretation of Financial Instruments, Res Judicata, Rectification, Estoppel
Contract Law Commercial Law Banking and Finance Breach of Contract Trust Deeds Eurobonds Damages for Loss of Chance Interpretation of Financial Instruments +3 more

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Parties

The Law Debenture Trust Corporation PLC

Claimant

Elektrim S.A.

First Defendant

Concord Trust

Second Defendant / Interested Party

Procedural Posture

Civil (commercial/contract) / Judgment After Trial

Legal Issues

  1. 1 Whether Elektrim breached its obligations under the Trust Deed and bond conditions by failing to implement the machinery for the Contingent Payment under condition 6(k)
  2. 2 Proper construction of condition 6(k) regarding the obligation to pay the Contingent Payment
  3. 3 Whether the Trustee is entitled to damages for loss of a chance to receive the Contingent Payment

Ratio Decidendi

Condition 6(k) of the Trust Deed imposed an obligation on Elektrim to operate the machinery for the Contingent Payment regardless of whether the bonds were redeemed by the Repayment Maturity Date. Elektrim's failure to do so was a breach of contract. The Trustee is entitled to damages for loss of a chance to receive the Contingent Payment, assessed by reference to the fair market value of Elektrim's assets as at 11 July 2006. Estoppel and rectification would also have been available if necessary. Res judicata does not bar the Trustee's alternative claim as the cause of action had not arisen at the time of the prior proceedings.

Court Disposition

Judgment for the Claimant (Trustee) against Elektrim S.A.

Orders

  • Elektrim S.A. to pay damages to the Trustee for breach of contract, assessed by reference to the loss of a chance to receive the Contingent Payment under condition 6(k), with quantum to be agreed or referred back to court if not agreed.
  • Costs and further directions reserved.