ATAL TECHNOLOGIES LTD v. STRATECH SYSTEMS LTD

ATAL TECHNOLOGIES LTD v. STRATECH SYSTEMS LTD

ATAL was entitled to terminate the Sub-Contract because Stratech's persistent and continuing threat to disable the AVRS via programmable 'tokens' amounted to illegitimate pressure and repudiatory conduct; AMS and KMS were Custom Programs therefore Stratech was obliged to provide source code to ATAL/Government while AVRS was Contractor Supplied Software subject to an irrevocable licence on delivery; Stratech's copyright and defamation claims failed; net damages in favour of ATAL were assessed at HK$8,720,000 with specified interest and costs orders.

Citation
ATAL TECHNOLOGIES LTD v. STRATECH SYSTEMS LTD
Parties
Plaintiff (hcct 56/2006); Defendant (hcct 3/2007): ATAL Technologies Limited; Defendant (hcct 56/2006); Plaintiff (hcct 3/2007): Stratech Systems Limited; 2nd Defendant (hcct 3/2007): Poon Lok To Otto
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
30 June 2011
Case Number
HCCT56/2006
Procedural Posture
Construction and Arbitration Proceedings (consolidated HCCT 56/2006 & HCCT 3/2007) / Final Judgment After Trial
Outcome
Judgment for ATAL Technologies Limited against Stratech Systems Limited; net damages awarded to ATAL in the amount of HK$8,720,000; interest and costs orders made.
Legal Topics
Termination, Repudiatory Breach, Economic Duress, Source Code and Software Licensing, Acceptance and Payment, Variation Orders, Set Off, Costs and Interest, Defamation Pleading, Fair Comment
Source Language
EN
Contract Law Construction Law Commercial Law Intellectual Property Law Copyright Law Tort Defamation Remedies Damages Termination +9 more

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Parties

ATAL Technologies Limited

Plaintiff (hcct 56/2006); Defendant (hcct 3/2007)

Stratech Systems Limited

Defendant (hcct 56/2006); Plaintiff (hcct 3/2007)

Poon Lok To Otto

2nd Defendant (hcct 3/2007)

Procedural Posture

Construction and Arbitration Proceedings (consolidated HCCT 56/2006 & HCCT 3/2007) / Final Judgment After Trial

Legal Issues

  1. 1 Whether ATAL was entitled to terminate the Sub-Contract for Stratech's failures and threats (including the tokens)
  2. 2 Whether Stratech's programmable 'tokens' amounted to repudiatory conduct
  3. 3 Classification of AMS/KMS as Custom Programs requiring source code and AVRS as Contractor Supplied Software subject to licence

Ratio Decidendi

ATAL was entitled to terminate the Sub-Contract because Stratech's persistent and continuing threat to disable the AVRS via programmable 'tokens' amounted to illegitimate pressure and repudiatory conduct; AMS and KMS were Custom Programs therefore Stratech was obliged to provide source code to ATAL/Government while AVRS was Contractor Supplied Software subject to an irrevocable licence on delivery; Stratech's copyright and defamation claims failed; net damages in favour of ATAL were assessed at HK$8,720,000 with specified interest and costs orders.

Court Disposition

Judgment for ATAL Technologies Limited against Stratech Systems Limited; net damages awarded to ATAL in the amount of HK$8,720,000; interest and costs orders made.

Orders

  • Damages awarded to ATAL in the net amount of HK$8,720,000
  • Interest at 1% above HSBC prime from 3 August 2006 (date of Statement of Claim) to date of judgment, thereafter at judgment rate until payment