Thames Valley Power Ltd. v Total Gas & Power Ltd.

Thames Valley Power Ltd. v Total Gas & Power Ltd.

The court held that increased market prices making performance uneconomic do not constitute force majeure under the Gas Supply Agreement. The contract required physical inability to perform, not mere commercial impracticability. The force majeure clause did not relieve Total from its obligation to supply gas at the contract price. The dispute resolution clause did not oust the court's jurisdiction in circumstances where the claim to force majeure was unsustainable as a matter of law, and a stay for expert determination was refused. TVPL was entitled to damages and specific performance if Total failed to supply gas.

Parties
Claimant: Thames Valley Power Limited; Defendant: Total Gas & Power Limited
Jurisdiction
England and Wales
Judgment Date
27 September 2005
Procedural Posture
Commercial Contract Dispute / Judgment on Application for Stay and Substantive Relief
Outcome
Stay refused; declarations granted in favour of TVPL; entitlement to damages and specific performance confirmed.
Legal Topics
Force Majeure, Expert Determination, Specific Performance, Damages, Interpretation of Contracts
Contract Law Commercial Law Force Majeure Expert Determination Specific Performance Damages Interpretation of Contracts

Case Brief

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Parties

Thames Valley Power Limited

Claimant

Total Gas & Power Limited

Defendant

Procedural Posture

Commercial Contract Dispute / Judgment on Application for Stay and Substantive Relief

Legal Issues

  1. 1 Whether Total was entitled to serve a force majeure notice under the Gas Supply Agreement on the basis of increased market prices rendering performance uneconomic
  2. 2 Whether the dispute should be stayed for expert determination under the contract's dispute resolution clause
  3. 3 Whether TVPL is entitled to damages and/or specific performance if Total fails to supply gas

Ratio Decidendi

The court held that increased market prices making performance uneconomic do not constitute force majeure under the Gas Supply Agreement. The contract required physical inability to perform, not mere commercial impracticability. The force majeure clause did not relieve Total from its obligation to supply gas at the contract price. The dispute resolution clause did not oust the court's jurisdiction in circumstances where the claim to force majeure was unsustainable as a matter of law, and a stay for expert determination was refused. TVPL was entitled to damages and specific performance if Total failed to supply gas.

Court Disposition

Stay refused; declarations granted in favour of TVPL; entitlement to damages and specific performance confirmed.

Orders

  • Total's application for a stay is dismissed.
  • Declaration that Total was not entitled to serve the force majeure notice of 5 July 2005.