Astrazeneca UK Ltd v Albemarle International Corp & Anor

Astrazeneca UK Ltd v Albemarle International Corp & Anor

Clause H of the supply agreement imposed a binding obligation on AstraZeneca to disclose to Albemarle the details of any third party offer for propofol and afford Albemarle the opportunity to match that offer. AstraZeneca breached clause H by awarding the contract to Sochinaz without giving Albemarle that opportunity and by refusing to award the business to Albemarle when it matched the offer. Albemarle was entitled to terminate the supply agreement for this breach. Albemarle's breach of delivery obligations did not excuse AstraZeneca's breach of clause H. Clause D8 did not oblige Albemarle to sell safety stock to AstraZeneca. Clause M limited AstraZeneca's damages for non-delivery but...

Parties
Claimant: AstraZeneca UK Limited; First Defendant: Albemarle International Corporation; Second Defendant: Albemarle Corporation
Jurisdiction
England and Wales
Judgment Date
21 June 2011
Procedural Posture
Commercial Contract Dispute / Judgment After Trial of Liability and Construction Issues
Outcome
Judgment for Albemarle on liability for breach of clause H; judgment for AstraZeneca for limited damages for Albemarle's breach of delivery obligations; quantum of Albemarle's damages to be determined at a later trial.
Legal Topics
Right of First Refusal, Breach of Contract, Damages, Limitation of Liability, Supply Agreements
Contract Law Commercial Law Right of First Refusal Breach of Contract Damages Limitation of Liability Supply Agreements

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Parties

AstraZeneca UK Limited

Claimant

Albemarle International Corporation

First Defendant

Albemarle Corporation

Second Defendant

Procedural Posture

Commercial Contract Dispute / Judgment After Trial of Liability and Construction Issues

Legal Issues

  1. 1 Meaning and effect of clause H (right of first refusal) in the supply agreement
  2. 2 Whether AstraZeneca breached clause H by not giving Albemarle the opportunity to match a third party offer
  3. 3 Whether Albemarle matched the third party offer

Ratio Decidendi

Clause H of the supply agreement imposed a binding obligation on AstraZeneca to disclose to Albemarle the details of any third party offer for propofol and afford Albemarle the opportunity to match that offer. AstraZeneca breached clause H by awarding the contract to Sochinaz without giving Albemarle that opportunity and by refusing to award the business to Albemarle when it matched the offer. Albemarle was entitled to terminate the supply agreement for this breach. Albemarle's breach of delivery obligations did not excuse AstraZeneca's breach of clause H. Clause D8 did not oblige Albemarle to sell safety stock to AstraZeneca. Clause M limited AstraZeneca's damages for non-delivery but...

Court Disposition

Judgment for Albemarle on liability for breach of clause H; judgment for AstraZeneca for limited damages for Albemarle's breach of delivery obligations; quantum of Albemarle's damages to be determined at a later trial.

Orders

  • AstraZeneca's damages for Albemarle's breach of delivery obligations limited to the purchase price of undelivered DIP under clause M.
  • Albemarle entitled in principle to damages for AstraZeneca's breach of clause H, not excluded or limited by clause M; quantum to be determined at a subsequent trial.