Ericsson Ab v Eads Defence and Security Systems Ltd. [2009] EWHC 2598 (TCC) (22 October 2009)

Ericsson Ab v Eads Defence and Security Systems Ltd. [2009] EWHC 2598 (TCC) (22 October 2009)

Ericsson failed to establish that damages would not be an adequate remedy or that the balance of justice required an injunction to restrain EADS from terminating the contract. The dispute resolution clause did not suspend EADS's contractual rights pending adjudication or mediation. Mediation and adjudication are not mutually exclusive under the contract, and the courts retain final jurisdiction over disputes. Both applications for injunctions are dismissed.

Citation
[2009] EWHC 2598 (TCC)
Parties
Claimant: Ericsson AB; Defendant: EADS Defence and Security Systems Limited
Jurisdiction
England and Wales
Judgment Date
22 October 2009
Procedural Posture
Interim Injunction Applications in Commercial Contract Dispute / High Court (technology and Construction Court) Application for Interim Relief
Outcome
Both applications for interim injunctions dismissed. Declarations to be drafted to reflect findings on dispute resolution clause.
Legal Topics
Interim Injunctions, Termination of Contract, Dispute Resolution Clauses, Adjudication and Mediation, Liquidated Damages, Material Default, Interpretation of Commercial Contracts
Commercial Law Contract Law Technology Law Interim Injunctions Termination of Contract Dispute Resolution Clauses Adjudication and Mediation Liquidated Damages +2 more

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Parties

Ericsson AB

Claimant

EADS Defence and Security Systems Limited

Defendant

Procedural Posture

Interim Injunction Applications in Commercial Contract Dispute / High Court (technology and Construction Court) Application for Interim Relief

Legal Issues

  1. 1 Whether Ericsson is entitled to an interim injunction restraining EADS from terminating the contract pending adjudication or trial
  2. 2 Whether EADS is entitled to an injunction restraining Ericsson from pursuing adjudication
  3. 3 Proper construction of the dispute resolution clause (Clause 31)

Ratio Decidendi

Ericsson failed to establish that damages would not be an adequate remedy or that the balance of justice required an injunction to restrain EADS from terminating the contract. The dispute resolution clause did not suspend EADS's contractual rights pending adjudication or mediation. Mediation and adjudication are not mutually exclusive under the contract, and the courts retain final jurisdiction over disputes. Both applications for injunctions are dismissed.

Court Disposition

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

Orders

  • Ericsson's application for an injunction to restrain termination is refused.
  • EADS's application for an injunction to restrain adjudication is refused.