Ericsson Ab v Eads Defence and Security Systems Ltd.

Ericsson Ab v Eads Defence and Security Systems Ltd.

The court refused both applications for injunctions. Ericsson failed to show that damages would not be an adequate remedy for termination, and the contract did not suspend EADS’s right to terminate pending adjudication. The dispute resolution clause allowed either party to pursue mediation or adjudication, or both, and did not make them mutually exclusive. Courts retain final jurisdiction over disputes, and adjudicators’ decisions are enforceable unless manifest error is shown.

Parties
Claimant: Ericsson AB; Defendant: EADS Defence and Security Systems Limited
Jurisdiction
England and Wales
Judgment Date
22 October 2009
Procedural Posture
Commercial Contract Dispute (injunction Applications) / Ruling on Interim Injunction Applications
Outcome
Both applications for injunctions dismissed. Declarations to be drafted to reflect findings on the dispute resolution clause.
Legal Topics
Interim Injunctions, Termination of Contract, Dispute Resolution Clauses, Adjudication, Mediation, Liquidated Damages
Contract Law Commercial Law Interim Injunctions Termination of Contract Dispute Resolution Clauses Adjudication Mediation Liquidated Damages

Case Brief

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Parties

Ericsson AB

Claimant

EADS Defence and Security Systems Limited

Defendant

Procedural Posture

Commercial Contract Dispute (injunction Applications) / Ruling on Interim Injunction Applications

Legal Issues

  1. 1 Whether an injunction should be granted to prevent EADS from terminating the contract before adjudication or trial
  2. 2 Whether Ericsson can pursue adjudication after electing mediation under the dispute resolution clause
  3. 3 Whether the dispute resolution clause suspends contractual rights to terminate

Ratio Decidendi

The court refused both applications for injunctions. Ericsson failed to show that damages would not be an adequate remedy for termination, and the contract did not suspend EADS’s right to terminate pending adjudication. The dispute resolution clause allowed either party to pursue mediation or adjudication, or both, and did not make them mutually exclusive. Courts retain final jurisdiction over disputes, and adjudicators’ decisions are enforceable unless manifest error is shown.

Court Disposition

Both applications for injunctions dismissed. Declarations to be drafted to reflect findings on the dispute resolution clause.

Orders

  • Ericsson’s application for an injunction to prevent termination is refused.
  • EADS’s application for an injunction to prevent adjudication is refused.