Globe Motors, Inc & Ors v TRW Lucas Varity Electric Steering Ltd & Anor [2016] EWCA Civ 396 (20 April 2016)

Globe Motors, Inc & Ors v TRW Lucas Varity Electric Steering Ltd & Anor [2016] EWCA Civ 396 (20 April 2016)

The Court of Appeal held that the judge erred in construing 'Products' to include Gen 2 motors that Globe could have produced via Engineering Changes without TRW Lucas proposing such changes. The Agreement did not extend exclusivity to products not formally subjected to the Engineering Changes process. Porto did not become a party to the Agreement by conduct alone, given the written variation requirement in Article 6.3.

Citation
[2016] EWCA Civ 396
Parties
Claimant/respondent: Globe Motors, Inc; Claimant/respondent: Globe Motors Portugal-Material Electrico Para A Industria Automovel LDA; Claimant/respondent: Safran USA Inc; First Defendant/appellant: TRW Lucas Varity Electric Steering Limited; Second Defendant: TRW Limited
Jurisdiction
England and Wales
Judgment Date
20 April 2016
Procedural Posture
Appeal / Court of Appeal (civil Division), Appeal From High Court Judgment
Outcome
Appeal allowed on ground 1; remainder of grounds not decided except ground 6, which was addressed.
Legal Topics
Interpretation of Contracts, Exclusive Supply Agreements, Variation of Contract, Long Term Contracts, Engineering Changes, Implied Terms, Novation
Contract Law Commercial Law Interpretation of Contracts Exclusive Supply Agreements Variation of Contract Long Term Contracts Engineering Changes Implied Terms +1 more

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Parties

Globe Motors, Inc

Claimant/respondent

Globe Motors Portugal-Material Electrico Para A Industria Automovel LDA

Claimant/respondent

Safran USA Inc

Claimant/respondent

TRW Lucas Varity Electric Steering Limited

First Defendant/appellant

TRW Limited

Second Defendant

Procedural Posture

Appeal / Court of Appeal (civil Division), Appeal From High Court Judgment

Legal Issues

  1. 1 Whether 'Products' in the exclusive supply agreement included motors that could have been produced by Globe via 'Engineering Changes'
  2. 2 Whether the Agreement covered Gen 2 motors purchased from Emerson
  3. 3 Whether Porto became a party to the Agreement by variation or conduct

Ratio Decidendi

The Court of Appeal held that the judge erred in construing 'Products' to include Gen 2 motors that Globe could have produced via Engineering Changes without TRW Lucas proposing such changes. The Agreement did not extend exclusivity to products not formally subjected to the Engineering Changes process. Porto did not become a party to the Agreement by conduct alone, given the written variation requirement in Article 6.3.

Court Disposition

Appeal allowed on ground 1; remainder of grounds not decided except ground 6, which was addressed.

Orders

  • Judge's finding that Gen 2 motors fell within 'Products' under the Agreement overturned.
  • No need to decide grounds 2-5.