OMV Petrom SA v Glencore International AG [2017] EWCA Civ 195 (27 March 2017)

OMV Petrom SA v Glencore International AG [2017] EWCA Civ 195 (27 March 2017)

The judge erred in treating the enhanced interest provisions as purely compensatory; the court has discretion to award a non-compensatory, incentive-based uplift up to 10% to reflect unreasonable conduct and to encourage settlement. In this case, Glencore's conduct justified the maximum 10% uplift on both damages and costs.

Citation
[2017] EWCA Civ 195
Parties
Claimant/appellant: OMV Petrom SA; Defendant/respondent: Glencore International AG
Jurisdiction
England and Wales
Judgment Date
27 March 2017
Procedural Posture
Civil Appeal / Appeal From High Court (commercial Court) to Court of Appeal
Outcome
Appeal allowed
Legal Topics
CPR Part 36 Offers, Interest on Damages, Indemnity Costs, Enhanced Interest Rates, Costs Sanctions
Civil Procedure Commercial Law CPR Part 36 Offers Interest on Damages Indemnity Costs Enhanced Interest Rates Costs Sanctions

Case Brief

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Parties

OMV Petrom SA

Claimant/appellant

Glencore International AG

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court (commercial Court) to Court of Appeal

Legal Issues

  1. 1 Whether the court's discretion to award enhanced interest under CPR Part 36.14(3)(a) and (c) is purely compensatory or may include a penal/incentive element
  2. 2 What is the appropriate rate of enhanced interest to award on damages and costs when a claimant's Part 36 offer is beaten at trial and the defendant has behaved unreasonably

Ratio Decidendi

The judge erred in treating the enhanced interest provisions as purely compensatory; the court has discretion to award a non-compensatory, incentive-based uplift up to 10% to reflect unreasonable conduct and to encourage settlement. In this case, Glencore's conduct justified the maximum 10% uplift on both damages and costs.

Court Disposition

Appeal allowed

Orders

  • Enhanced interest on both the award and costs for the period from expiry of the Part 36 offer until judgment to be at 10% over base rate.