Brown-Forman Beverages Europe Ltd v Bacardi UK Ltd

Brown-Forman Beverages Europe Ltd v Bacardi UK Ltd

BUKL's obligations under clause 6.2 and paragraph 5 of Schedule 6.2 are primary indemnity obligations, not guarantees. The assertion of equitable set off by BML prevents BFBE from enforcing its claim, and does not trigger BUKL's liability. The rule in Holme v Brunskill does not apply to indemnity obligations. The Addendum Agreement constituted a material variation, and BFBE failed to prove BUKL consented to it. Therefore, BUKL is not liable to BFBE for the sums claimed.

Parties
Claimant: Brown-Forman Beverages Europe Ltd; Defendant: Bacardi UK Ltd
Jurisdiction
England and Wales
Judgment Date
19 May 2021
Procedural Posture
Commercial Contract Dispute / Judgment on Preliminary Issues
Outcome
Claim dismissed on preliminary issues; issues resolved in favour of Bacardi UK Ltd.
Legal Topics
Suretyship, Guarantee Vs Indemnity, Variation of Contract, Equitable Set Off, Holme V Brunskill Rule
Contract Law Commercial Law Suretyship Guarantee Vs Indemnity Variation of Contract Equitable Set Off Holme V Brunskill Rule

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Parties

Brown-Forman Beverages Europe Ltd

Claimant

Bacardi UK Ltd

Defendant

Procedural Posture

Commercial Contract Dispute / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether Bacardi UK Ltd is liable under the suretyship provisions for sums claimed by Brown-Forman Beverages Europe Ltd against Bacardi-Martini Ltd referred to arbitration
  2. 2 Interpretation of clause 6.2 and Schedule 6.2 (paragraph 5) of the Agreement
  3. 3 Effect of equitable set off asserted by Bacardi-Martini Ltd

Ratio Decidendi

BUKL's obligations under clause 6.2 and paragraph 5 of Schedule 6.2 are primary indemnity obligations, not guarantees. The assertion of equitable set off by BML prevents BFBE from enforcing its claim, and does not trigger BUKL's liability. The rule in Holme v Brunskill does not apply to indemnity obligations. The Addendum Agreement constituted a material variation, and BFBE failed to prove BUKL consented to it. Therefore, BUKL is not liable to BFBE for the sums claimed.

Court Disposition

Claim dismissed on preliminary issues; issues resolved in favour of Bacardi UK Ltd.