SCANMUDRING AS AGAINST JAMES FISHER MFE LIMITED [2019] ScotCS CSIH_10 (27 February 2019)

SCANMUDRING AS AGAINST JAMES FISHER MFE LIMITED [2019] ScotCS CSIH_10 (27 February 2019)

The majority held that the scanmachine had suffered a breakdown within the meaning of the contract, as an essential part (the pad-eye) failed, rendering the machine non-operational and incapable of being moved or recovered as intended. The contract did not require payment of day rates during periods when the machine was not operational due to breakdown. The concept of 'temporary abandonment' in the contract did not apply to situations where the machine was unavailable due to breakdown. The defenders were not entitled to indemnity for recovery costs, as the relevant clause protected them only from claims by the pursuers, not for direct recovery of such expenses.

Citation
[2019] ScotCS CSIH_10
Parties
Pursuers and Respondents: SCANMUDRING AS; Defenders and Reclaimers: JAMES FISHER MFE LIMITED
Jurisdiction
Scotland
Judgment Date
27 February 2019
Procedural Posture
Commercial Contract Dispute (reclaiming Motion) / Appeal (reclaiming Motion) Before the Inner House, Court of Session
Outcome
Appeal allowed in principal action; decree of absolvitor for defenders; counterclaim dismissed.
Legal Topics
Contractual Interpretation, Hire of Equipment, Service Agreements, Warranties and Exclusions, Indemnity Clauses, Maintenance and Repair Obligations
Contract Law Commercial Law Contractual Interpretation Hire of Equipment Service Agreements Warranties and Exclusions Indemnity Clauses Maintenance and Repair Obligations

Case Brief

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Parties

SCANMUDRING AS

Pursuers and Respondents

JAMES FISHER MFE LIMITED

Defenders and Reclaimers

Procedural Posture

Commercial Contract Dispute (reclaiming Motion) / Appeal (reclaiming Motion) Before the Inner House, Court of Session

Legal Issues

  1. 1 Whether the scanmachine suffered a 'breakdown' under the contract terms
  2. 2 Whether the scanmachine was 'temporarily abandoned' within the meaning of the contract
  3. 3 Whether the pursuers were entitled to payment of day rates during the period the scanmachine was stuck

Ratio Decidendi

The majority held that the scanmachine had suffered a breakdown within the meaning of the contract, as an essential part (the pad-eye) failed, rendering the machine non-operational and incapable of being moved or recovered as intended. The contract did not require payment of day rates during periods when the machine was not operational due to breakdown. The concept of 'temporary abandonment' in the contract did not apply to situations where the machine was unavailable due to breakdown. The defenders were not entitled to indemnity for recovery costs, as the relevant clause protected them only from claims by the pursuers, not for direct recovery of such expenses.

Court Disposition

Appeal allowed in principal action; decree of absolvitor for defenders; counterclaim dismissed.

Orders

  • Commercial judge's interlocutor of 15 March 2018 recalled in so far as it sustained the pursuers’ pleas-in-law and granted decree for payment.
  • Pursuers’ pleas-in-law repelled; defenders’ third and fourth pleas-in-law sustained; decree of absolvitor pronounced.