Centrica Plc & Anor v Premier Power Ltd

Centrica Plc & Anor v Premier Power Ltd

Centrica is entitled to recover MPPs and balancing and scheduling charges from Premier Power Limited as BGUOCs under the GSA, as these constitute costs and expenses reasonably and properly incurred by Centrica in operating the pipeline, regardless of whether the operator is an affiliate or a third party. The contract's language and commercial context support this construction.

Parties
Appellant: Centrica plc and Anr; Respondent: Premier Power Limited
Jurisdiction
England and Wales
Judgment Date
27 November 2007
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed (cross-appeal by Centrica allowed); judge’s order set aside
Legal Topics
Interpretation of Contracts, Variation of Contracts, Gas Supply Agreements, Pass Through of Costs
Contract Law Commercial Law Interpretation of Contracts Variation of Contracts Gas Supply Agreements Pass Through of Costs

Case Brief

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Parties

Centrica plc and Anr

Appellant

Premier Power Limited

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether Centrica can recover 'monthly postalised payments' (MPPs) and balancing and scheduling charges from Premier Power Limited as BG Unpredictable Operating Costs (BGUOCs) under the Gas Supply Agreement (GSA)
  2. 2 Whether Centrica is entitled to vary the GSA to recover such charges following regulatory changes

Ratio Decidendi

Centrica is entitled to recover MPPs and balancing and scheduling charges from Premier Power Limited as BGUOCs under the GSA, as these constitute costs and expenses reasonably and properly incurred by Centrica in operating the pipeline, regardless of whether the operator is an affiliate or a third party. The contract's language and commercial context support this construction.

Court Disposition

Appeal allowed (cross-appeal by Centrica allowed); judge’s order set aside

Orders

  • Centrica may recover MPPs and balancing and scheduling charges from Premier Power Limited as BGUOCs under the GSA.