Contract Natural Gas Ltd v ZOG Energy Ltd [2025] EWHC 86 (Ch) (21 January 2025)

Contract Natural Gas Ltd v ZOG Energy Ltd [2025] EWHC 86 (Ch) (21 January 2025)

The £250,000 limitation of liability in clause 13.3 of the MSA applies globally to all claims between the parties, not per Transaction. The exception in clause 13.9 does not apply to ZOG's claim. Clause 13.5 applies bilaterally to both parties and bars the remedy after 12 months but does not extinguish the underlying liability, so a time-barred claim may be set off in insolvency. Time does not stop running for limitation purposes on entry into administration or liquidation, and acknowledgment in a statement of affairs may restart the limitation period if properly established.

Citation
[2025] EWHC 86 (Ch)
Parties
Applicant/respondent: Contract Natural Gas Limited (in liquidation); Respondent/applicant: ZOG Energy Limited (in liquidation)
Jurisdiction
England and Wales
Judgment Date
21 January 2025
Procedural Posture
Insolvency Application (proof of Debt Challenge) / Judgment on Preliminary Issues
Outcome
Preliminary issues determined in favour of CNG on the limitation of liability and in favour of ZOG on the bilateral application of the time bar; both parties' claims subject to the findings on limitation and set-off.
Legal Topics
Limitation of Liability, Contractual Interpretation, Proof of Debt, Time Bar Clauses, Set Off in Insolvency
Insolvency Contract Limitation of Liability Contractual Interpretation Proof of Debt Time Bar Clauses Set Off in Insolvency

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Parties

Contract Natural Gas Limited (in liquidation)

Applicant/respondent

ZOG Energy Limited (in liquidation)

Respondent/applicant

Procedural Posture

Insolvency Application (proof of Debt Challenge) / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether the £250,000 limitation of liability in clause 13.3 of the Master Sales Agreement applies globally or per Transaction; whether the exception in clause 13.9 applies to ZOG's claim; whether the contractual time bar in clause 13.5 applies to claims by CNG and/or ZOG and its effect; whether time stops running for limitation purposes on entry into administration or liquidation; whether acknowledgment in a statement of affairs restarts the limitation period; whether a time-barred claim can be set off in insolvency.

Ratio Decidendi

The £250,000 limitation of liability in clause 13.3 of the MSA applies globally to all claims between the parties, not per Transaction. The exception in clause 13.9 does not apply to ZOG's claim. Clause 13.5 applies bilaterally to both parties and bars the remedy after 12 months but does not extinguish the underlying liability, so a time-barred claim may be set off in insolvency. Time does not stop running for limitation purposes on entry into administration or liquidation, and acknowledgment in a statement of affairs may restart the limitation period if properly established.

Court Disposition

Preliminary issues determined in favour of CNG on the limitation of liability and in favour of ZOG on the bilateral application of the time bar; both parties' claims subject to the findings on limitation and set-off.

Orders

  • ZOG's claim against CNG is capped at £250,000 under clause 13.3 of the MSA.
  • The exception in clause 13.9 does not apply to ZOG's claim.