Harcap Ltd v FK Generators & Equipment Ltd [2017] EWHC 2765 (Comm) (19 October 2017)

Harcap Ltd v FK Generators & Equipment Ltd [2017] EWHC 2765 (Comm) (19 October 2017)

The Agreement's Abort Fee clause is clear: HarCap is entitled to US$500,000 if the Defendants unilaterally cancel or abort the Transaction, unless cancellation was due to failure to agree binding terms acting reasonably, which did not occur. The obligation to pay US$150,000 as a first cost-cover payment is fixed and not contingent on prior termination or incurred costs. The Defendants breached Exclusivity & Confidentiality Undertaking (c) by entering into an arrangement with V-Power that competed with the Transaction. The Abort Fee is not the exclusive remedy; the Agreement allows for additional equitable relief and damages.

Citation
[2017] EWHC 2765 (Comm)
Parties
Claimant: HarCap Limited; Defendant: F. K. Generators & Equipment Limited
Jurisdiction
England and Wales
Judgment Date
19 October 2017
Procedural Posture
Commercial Court Claim / Summary Judgment and Strike Out Applications
Outcome
Summary judgment granted in favour of HarCap Limited.
Legal Topics
Summary Judgment, Strike Out, Contractual Construction, Exclusivity Agreements, Abort Fee, Costs and Expenses, Breach of Contract
Contract Law Commercial Law Summary Judgment Strike Out Contractual Construction Exclusivity Agreements Abort Fee Costs and Expenses +1 more

Case Brief

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Parties

HarCap Limited

Claimant

F. K. Generators & Equipment Limited

Defendant

Procedural Posture

Commercial Court Claim / Summary Judgment and Strike Out Applications

Legal Issues

  1. 1 Is HarCap entitled to the Abort Fee under the Agreement?
  2. 2 Are the Defendants liable for the first cost-cover payment of US$150,000?
  3. 3 Did the Defendants breach Exclusivity & Confidentiality Undertaking (c)?

Ratio Decidendi

The Agreement's Abort Fee clause is clear: HarCap is entitled to US$500,000 if the Defendants unilaterally cancel or abort the Transaction, unless cancellation was due to failure to agree binding terms acting reasonably, which did not occur. The obligation to pay US$150,000 as a first cost-cover payment is fixed and not contingent on prior termination or incurred costs. The Defendants breached Exclusivity & Confidentiality Undertaking (c) by entering into an arrangement with V-Power that competed with the Transaction. The Abort Fee is not the exclusive remedy; the Agreement allows for additional equitable relief and damages.

Court Disposition

Summary judgment granted in favour of HarCap Limited.

Orders

  • Defendants to pay HarCap Limited US$500,000 Abort Fee plus contractual interest at 12% per annum from 30 January 2017.
  • Defendants to pay HarCap Limited US$150,000 first cost-cover payment, less interim payment already made, subject to set-off against Abort Fee.