De Havilland Aircraft of Canada Ltd v Spicejet Ltd

De Havilland Aircraft of Canada Ltd v Spicejet Ltd

Change Order 6 did not suspend the defendant’s obligation to pay pre-delivery payments for Aircraft 9–20; the defendant’s counterclaim under LA 13 was unarguable and did not excuse non-payment or entitle set-off; the set-off exclusion was effective; the liquidated damages clause was not a penalty; and the claimant was entitled to summary judgment for the amounts claimed.

Parties
Claimant: De Havilland Aircraft of Canada Limited; Defendant: SpiceJet Limited
Jurisdiction
England and Wales
Judgment Date
23 February 2021
Procedural Posture
Commercial Contract Dispute / Summary Judgment Application and Cross Application for Strike Out
Outcome
Summary judgment for the claimant; defendant’s counterclaim struck out.
Legal Topics
Summary Judgment, Liquidated Damages, Penalty Clauses, Set Off, Contract Construction, Breach of Contract
Contract Law Commercial Law Summary Judgment Liquidated Damages Penalty Clauses Set Off Contract Construction Breach of Contract

Case Brief

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Parties

De Havilland Aircraft of Canada Limited

Claimant

SpiceJet Limited

Defendant

Procedural Posture

Commercial Contract Dispute / Summary Judgment Application and Cross Application for Strike Out

Legal Issues

  1. 1 Whether Change Order 6 suspended payment obligations for Aircraft 9–20 (CO6 issue)
  2. 2 Whether breach of Letter Agreement 13 excused non-payment or entitled set-off (LA 13 issue)
  3. 3 Whether set-off was contractually excluded (set-off issue)

Ratio Decidendi

Change Order 6 did not suspend the defendant’s obligation to pay pre-delivery payments for Aircraft 9–20; the defendant’s counterclaim under LA 13 was unarguable and did not excuse non-payment or entitle set-off; the set-off exclusion was effective; the liquidated damages clause was not a penalty; and the claimant was entitled to summary judgment for the amounts claimed.

Court Disposition

Summary judgment for the claimant; defendant’s counterclaim struck out.

Orders

  • Claimant entitled to terminate the Purchase Agreement and claim liquidated damages of US$42,950,000.
  • Defendant’s counterclaim struck out as unarguable.