Paros Plc v Worldlink Group Plc

Paros Plc v Worldlink Group Plc

Clause 5.1, including the break fee cap of £150,000, remained applicable after the transaction structure changed; Worldlink's liability is capped at £150,000. The break fee was enforceable after the variation as it no longer constituted unlawful financial assistance. ParOS is not entitled to further damages for late payment, as such losses were too remote and not foreseeable. Breaches of the exclusivity clause occurred but did not cause ParOS any real loss; only nominal damages are awarded. No duty of care in tort arose between the parties beyond the contract.

Parties
Claimant: PAROS PLC; Defendant: WORLDLINK GROUP PLC
Jurisdiction
England and Wales
Judgment Date
01 March 2012
Procedural Posture
Commercial Contract Dispute / Judgment After Trial
Outcome
Claim allowed in part; judgment for claimant for break fee and nominal damages only.
Legal Topics
Construction of Contract, Financial Assistance Prohibition, Break Fee Enforceability, Exclusivity Clause Breach, Negligent Misstatement, Damages for Late Payment
Contract Law Company Law Tort Law Construction of Contract Financial Assistance Prohibition Break Fee Enforceability Exclusivity Clause Breach Negligent Misstatement +1 more

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Parties

PAROS PLC

Claimant

WORLDLINK GROUP PLC

Defendant

Procedural Posture

Commercial Contract Dispute / Judgment After Trial

Legal Issues

  1. 1 Proper construction and enforceability of clause 5.1 (break fee and costs) of the Heads of Terms
  2. 2 Whether clause 5.1 constituted unlawful financial assistance under section 151 Companies Act 1985
  3. 3 Whether ParOS is entitled to damages for non-payment of sums due under clause 5.1

Ratio Decidendi

Clause 5.1, including the break fee cap of £150,000, remained applicable after the transaction structure changed; Worldlink's liability is capped at £150,000. The break fee was enforceable after the variation as it no longer constituted unlawful financial assistance. ParOS is not entitled to further damages for late payment, as such losses were too remote and not foreseeable. Breaches of the exclusivity clause occurred but did not cause ParOS any real loss; only nominal damages are awarded. No duty of care in tort arose between the parties beyond the contract.

Court Disposition

Claim allowed in part; judgment for claimant for break fee and nominal damages only.

Orders

  • Worldlink to pay ParOS £150,000 as break fee under clause 5.1.
  • Worldlink to pay ParOS £4 nominal damages for breach of exclusivity clause.