The Procter & Gamble Company & Ors v Svenska Cellulosa Aktiebolaget SCA & Anor

The Procter & Gamble Company & Ors v Svenska Cellulosa Aktiebolaget SCA & Anor

The agreement, properly construed, did not provide for a fixed exchange rate for payment in sterling for goods supplied from Manchester. The prices were expressed in Euros, and the reference to a fixed exchange rate in the budget document was not incorporated as a contractual term. The principle of nominalism applies, and payment should be made at the prevailing exchange rate at the date of payment.

Parties
Claimant/respondent: The Procter & Gamble Company; Claimant/respondent: Procter & Gamble International Operations SA; Claimant/respondent: Procter & Gamble Product Supply (U.K.) Limited; Defendant/appellant: Svenska Cellulosa Aktiebolaget SCA; Defendant/appellant: SCA Hygiene Products UK Limited
Jurisdiction
England and Wales
Judgment Date
01 November 2012
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Implied Terms, Currency of Account and Payment, Interpretation of Contracts, Exchange Rate Risk
Contract Law Commercial Law Implied Terms Currency of Account and Payment Interpretation of Contracts Exchange Rate Risk

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Parties

The Procter & Gamble Company

Claimant/respondent

Procter & Gamble International Operations SA

Claimant/respondent

Procter & Gamble Product Supply (U.K.) Limited

Claimant/respondent

Svenska Cellulosa Aktiebolaget SCA

Defendant/appellant

SCA Hygiene Products UK Limited

Defendant/appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the contract was subject to an implied term that payment in sterling for goods supplied from Manchester should be subject to a fixed rate of exchange.
  2. 2 Whether the agreement provided for a fixed or floating exchange rate for payment.

Ratio Decidendi

The agreement, properly construed, did not provide for a fixed exchange rate for payment in sterling for goods supplied from Manchester. The prices were expressed in Euros, and the reference to a fixed exchange rate in the budget document was not incorporated as a contractual term. The principle of nominalism applies, and payment should be made at the prevailing exchange rate at the date of payment.

Court Disposition

Appeal dismissed