Motortrak Ltd v FCA Australia Pty Ltd

Motortrak Ltd v FCA Australia Pty Ltd

The court found, on balance of probabilities, that payments made by Motortrak to ACN were bribes to Mr Campbell to procure the contract with FCAA, not payments pursuant to a genuine Licence Termination Agreement. FCAA affirmed the contract after knowledge of bribery, thus lost the right to rescind. Motortrak's claim for loss of profit is excluded by clause 9.5.2. FCAA is entitled to recover the amount of the bribe as money had and received, but not both the bribe and damages for loss. FCAA did not establish entitlement to damages for loss beyond the bribe, except for the difference between contract price and fair market price as determined by US market comparables.

Parties
Claimant: Motortrak Ltd; Defendant: FCA Australia Pty Ltd
Jurisdiction
England and Wales
Judgment Date
30 April 2018
Procedural Posture
Commercial Claim / Final Judgment After Trial
Outcome
Claim and counterclaim both succeed in part.
Legal Topics
Bribery, Limitation of Liability, Affirmation of Contract, Damages, Exclusion Clauses
Contract Law Tort Law Commercial Law Bribery Limitation of Liability Affirmation of Contract Damages Exclusion Clauses

Case Brief

Summary, issues, holding and outcome

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Parties

Motortrak Ltd

Claimant

FCA Australia Pty Ltd

Defendant

Procedural Posture

Commercial Claim / Final Judgment After Trial

Legal Issues

  1. 1 Whether payments made by Motortrak to ACN were bribes to procure the contract with FCAA
  2. 2 Whether the Licence Termination Agreement was genuine or a sham
  3. 3 Whether FCAA affirmed the contract after knowledge of bribery

Ratio Decidendi

The court found, on balance of probabilities, that payments made by Motortrak to ACN were bribes to Mr Campbell to procure the contract with FCAA, not payments pursuant to a genuine Licence Termination Agreement. FCAA affirmed the contract after knowledge of bribery, thus lost the right to rescind. Motortrak's claim for loss of profit is excluded by clause 9.5.2. FCAA is entitled to recover the amount of the bribe as money had and received, but not both the bribe and damages for loss. FCAA did not establish entitlement to damages for loss beyond the bribe, except for the difference between contract price and fair market price as determined by US market comparables.

Court Disposition

Claim and counterclaim both succeed in part.

Orders

  • Motortrak's claim for payment of invoices for July-September 2016 dismissed.
  • Motortrak's claim for loss of profit dismissed as excluded by clause 9.5.2.