M & J Polymers Ltd v Imerys Minerals Ltd

M & J Polymers Ltd v Imerys Minerals Ltd

The 1160 dispersant supplied by the Claimant was not unfit for purpose, the Defendant was not entitled to reject further deliveries, and the Defendant's anticipatory repudiation was unjustified. The 'take or pay' clause was not a penalty but a commercially justified provision, and the Claimant is entitled to recover the agreed shortfall as a debt. The Defendant is entitled to credit for two Lixhe orders in January 2005 but not for pre-contractual December orders. The Arjo Wiggins counterclaim fails.

Parties
Claimant: M & J Polymers Ltd; Defendant: Imerys Minerals Ltd
Jurisdiction
England and Wales
Judgment Date
29 February 2008
Procedural Posture
Commercial Contract Dispute / Judgment After Trial
Outcome
Claim allowed in part; counterclaim dismissed in full
Legal Topics
Take or Pay Clauses, Penalty Clauses, Breach of Contract, Supply of Goods, Warranties, Repudiation, Damages
Contract Law Commercial Law Take or Pay Clauses Penalty Clauses Breach of Contract Supply of Goods Warranties Repudiation +1 more

Case Brief

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Parties

M & J Polymers Ltd

Claimant

Imerys Minerals Ltd

Defendant

Procedural Posture

Commercial Contract Dispute / Judgment After Trial

Legal Issues

  1. 1 Whether the 1160 dispersant supplied was fit for purpose and whether the Defendant was entitled to refuse further deliveries after 31 August 2005
  2. 2 Whether sums due under the 'take or pay' clause are recoverable as a debt or as damages and whether the clause is a penalty
  3. 3 Whether there was a shortfall in orders for 1183 in January 2005 and the amount thereof

Ratio Decidendi

The 1160 dispersant supplied by the Claimant was not unfit for purpose, the Defendant was not entitled to reject further deliveries, and the Defendant's anticipatory repudiation was unjustified. The 'take or pay' clause was not a penalty but a commercially justified provision, and the Claimant is entitled to recover the agreed shortfall as a debt. The Defendant is entitled to credit for two Lixhe orders in January 2005 but not for pre-contractual December orders. The Arjo Wiggins counterclaim fails.

Court Disposition

Claim allowed in part; counterclaim dismissed in full

Orders

  • Defendant to pay Claimant £1,818,296 for shortfall under the take or pay clause prior to May 2006, with credit for two Lixhe orders in January 2005
  • Defendant's counterclaim for Arjo Wiggins fails