MAYFLY GWR OFFSHORE CONTAINERS INDUSTRIA E COMERCIO LTDA AGAINST SWIRE OILFIELD SERVICES DO BRASIL LTDA [2022] ScotCS CSOH_26 (15 March 2022)

MAYFLY GWR OFFSHORE CONTAINERS INDUSTRIA E COMERCIO LTDA AGAINST SWIRE OILFIELD SERVICES DO BRASIL LTDA [2022] ScotCS CSOH_26 (15 March 2022)

The court held that the MSA did not replace or supersede the Distribution Agreement. Under Brazilian law, the MSA did not bind the defender due to the principle of privity of contract, and none of the exceptions to privity applied. Even if privity were overcome, the MSA did not display an intention to terminate or replace the Distribution Agreement, and the two agreements could co-exist. Therefore, the Distribution Agreement, including its exclusive distributorship and minimum purchase obligations, remained in force.

Citation
[2022] ScotCS CSOH_26
Parties
Pursuer: Mayfly GWR Offshore Containers Industria e Comercio Ltda; Defender: Swire Oilfield Services do Brasil Ltda
Jurisdiction
Scotland
Judgment Date
15 March 2022
Procedural Posture
Commercial Contract Dispute / Preliminary Proof on Contract Interpretation and Governing Law
Outcome
Pursuer's fourth plea in law sustained to the extent of deleting specified averments; case put out By Order for further procedure.
Legal Topics
Distribution Agreements, Supply Agreements, Privity of Contract, Interpretation of Contracts, Termination of Contracts, Governing Law Clauses
Contract Law Conflict of Laws Distribution Agreements Supply Agreements Privity of Contract Interpretation of Contracts Termination of Contracts Governing Law Clauses

Case Brief

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Parties

Mayfly GWR Offshore Containers Industria e Comercio Ltda

Pursuer

Swire Oilfield Services do Brasil Ltda

Defender

Procedural Posture

Commercial Contract Dispute / Preliminary Proof on Contract Interpretation and Governing Law

Legal Issues

  1. 1 Whether the Master Service Agreement (MSA) replaced or superseded the Distribution Agreement between the parties
  2. 2 Whether the MSA conferred rights or imposed obligations on the defender under Brazilian law (privity of contract)
  3. 3 Whether the Distribution Agreement was terminated or novated by the MSA

Ratio Decidendi

The court held that the MSA did not replace or supersede the Distribution Agreement. Under Brazilian law, the MSA did not bind the defender due to the principle of privity of contract, and none of the exceptions to privity applied. Even if privity were overcome, the MSA did not display an intention to terminate or replace the Distribution Agreement, and the two agreements could co-exist. Therefore, the Distribution Agreement, including its exclusive distributorship and minimum purchase obligations, remained in force.

Court Disposition

Pursuer's fourth plea in law sustained to the extent of deleting specified averments; case put out By Order for further procedure.

Orders

  • Averments in Answers 1 and 2 identified in the pursuer's written submissions are deleted.
  • Case to be put out By Order to discuss further procedure.