Harcap Ltd v FK Generators & Equipment Ltd

Harcap Ltd v FK Generators & Equipment Ltd

The contract's language was clear and unambiguous: the Abort Fee was payable upon unilateral cancellation by the Defendants, regardless of the reason, except for a defined carve-out not applicable here. The obligation to pay US$150,000 for costs and expenses was not negated by cancellation of the transaction. The Defendants breached the exclusivity undertaking by entering into an arrangement with V-Power, which related to or competed with the Transaction. The Abort Fee was not an exclusive remedy; the contract expressly preserved the right to damages and other remedies.

Parties
Claimant: HarCap Limited; Defendant: F. K. Generators & Equipment Limited
Jurisdiction
England and Wales
Judgment Date
19 October 2017
Procedural Posture
Commercial Contract Dispute (summary Judgment/strike Out Applications) / High Court (commercial Court) Summary Judgment Ruling
Outcome
Summary judgment granted for the Claimant on all four issues.
Legal Topics
Summary Judgment, Strike Out, Contractual Construction, Exclusivity Agreements, Remedies for Breach, Abort Fee Clauses
Contract Law Commercial Law Summary Judgment Strike Out Contractual Construction Exclusivity Agreements Remedies for Breach Abort Fee Clauses

Case Brief

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Parties

HarCap Limited

Claimant

F. K. Generators & Equipment Limited

Defendant

Procedural Posture

Commercial Contract Dispute (summary Judgment/strike Out Applications) / High Court (commercial Court) Summary Judgment Ruling

Legal Issues

  1. 1 Whether the Claimant is entitled to an Abort Fee of US$500,000 following cancellation of the contract
  2. 2 Whether the Defendants were obliged to pay US$150,000 for costs and expenses
  3. 3 Whether the Defendants breached the Exclusivity & Confidentiality Undertaking (c) by entering into an arrangement with V-Power

Ratio Decidendi

The contract's language was clear and unambiguous: the Abort Fee was payable upon unilateral cancellation by the Defendants, regardless of the reason, except for a defined carve-out not applicable here. The obligation to pay US$150,000 for costs and expenses was not negated by cancellation of the transaction. The Defendants breached the exclusivity undertaking by entering into an arrangement with V-Power, which related to or competed with the Transaction. The Abort Fee was not an exclusive remedy; the contract expressly preserved the right to damages and other remedies.

Court Disposition

Summary judgment granted for the Claimant on all four issues.

Orders

  • Defendants to pay the Abort Fee of US$500,000 plus contractual interest at 12% per annum from 30 January 2017.
  • Defendants to pay US$150,000 for costs and expenses, less any amount already paid, with set-off against the Abort Fee as appropriate.