Scottish Power Generation Ltd v. British Energy Generation (UK) Ltd & Anor [2002] ScotCS 9 (10th January, 2002)

Scottish Power Generation Ltd v. British Energy Generation (UK) Ltd & Anor [2002] ScotCS 9 (10th January, 2002)

The court held that while the first part of section 47(2) (interim possession of property) did not apply to the disputed sums, the second part (regarding the subject matter of the cause) did, as the dispute was fundamentally about the correct payments due under the NEA. The court exercised its discretion to order that the disputed sums be paid into a designated trust account, finding this appropriate given the size of the sums, the uncertainty over entitlement, and the inadequacy of the contractual mechanism in the changed circumstances.

Citation
[2002] ScotCS 9
Parties
Pursuer: Scottish Power Generation Limited; First Defender: British Energy Generation (UK) Limited; Second Defender: SSE Energy Supply Limited
Jurisdiction
Scotland
Procedural Posture
Commercial Contract Dispute / Interlocutory Motion for Interim Order
Outcome
Interim order granted in part
Legal Topics
Interim Orders, Contract Frustration, Implied Terms, Trust Accounts, Electricity Supply Contracts
Contract Law Commercial Law Interim Orders Contract Frustration Implied Terms Trust Accounts Electricity Supply Contracts

Case Brief

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Parties

Scottish Power Generation Limited

Pursuer

British Energy Generation (UK) Limited

First Defender

SSE Energy Supply Limited

Second Defender

Procedural Posture

Commercial Contract Dispute / Interlocutory Motion for Interim Order

Legal Issues

  1. 1 Whether the court can order disputed payments to be held in a designated trust account pending resolution of a contract dispute under section 47(2) of the Court of Session Act 1988
  2. 2 Whether the NEA contract is frustrated or contains implied terms for price calculation after the abolition of the Pool Price
  3. 3 Whether the court should exercise its discretion to grant the interim order sought

Ratio Decidendi

The court held that while the first part of section 47(2) (interim possession of property) did not apply to the disputed sums, the second part (regarding the subject matter of the cause) did, as the dispute was fundamentally about the correct payments due under the NEA. The court exercised its discretion to order that the disputed sums be paid into a designated trust account, finding this appropriate given the size of the sums, the uncertainty over entitlement, and the inadequacy of the contractual mechanism in the changed circumstances.

Court Disposition

Interim order granted in part

Orders

  • SP authorised to retain £6.54 million per month from future payments and deposit into a designated trust account until £52.3 million is reached.
  • Payments into the designated account to continue notwithstanding any reclaiming motion.