Whyte & Mackay Ltd v Capstone International [2010] ScotCS CSIH_87 (09 November 2010)

Whyte & Mackay Ltd v Capstone International [2010] ScotCS CSIH_87 (09 November 2010)

The interim order requiring reclaimers to accept orders from respondents significantly innovates on the contractual rights under clause 9, which allows reclaimers discretion to accept or reject orders. The balance of convenience does not justify imposing such an obligation pending litigation, and the Lord Ordinary's assessment was based on a misunderstanding of the alleged illegality and commercial risks. The interim order is recalled, but the interim interdict preventing reclaimers from appointing other distributors is maintained to preserve the status quo pending final determination.

Citation
[2010] ScotCS CSIH_87
Parties
Pursuer and Reclaimer: Whyte & Mackay Limited; Defender and Respondent: Capstone International Inc.
Jurisdiction
Scotland
Judgment Date
09 November 2010
Procedural Posture
Commercial Contract Dispute / Reclaiming Motion (appeal) Against Interlocutors Granting Interim Orders
Outcome
Interim order ad factum praestandum recalled; interim interdict maintained
Legal Topics
Specific Implement, Interim Orders, Breach of Contract, Distributorship Agreements, Balance of Convenience
Contract Law Commercial Law Specific Implement Interim Orders Breach of Contract Distributorship Agreements Balance of Convenience

Case Brief

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Parties

Whyte & Mackay Limited

Pursuer and Reclaimer

Capstone International Inc.

Defender and Respondent

Procedural Posture

Commercial Contract Dispute / Reclaiming Motion (appeal) Against Interlocutors Granting Interim Orders

Legal Issues

  1. 1 Whether the interim order for specific implement significantly innovates on the parties' contractual rights and obligations under the distributorship agreement
  2. 2 Whether the balance of convenience justifies granting interim orders pending litigation
  3. 3 Whether the reclaimers validly terminated the distributorship agreement for alleged material breach

Ratio Decidendi

The interim order requiring reclaimers to accept orders from respondents significantly innovates on the contractual rights under clause 9, which allows reclaimers discretion to accept or reject orders. The balance of convenience does not justify imposing such an obligation pending litigation, and the Lord Ordinary's assessment was based on a misunderstanding of the alleged illegality and commercial risks. The interim order is recalled, but the interim interdict preventing reclaimers from appointing other distributors is maintained to preserve the status quo pending final determination.

Court Disposition

Interim order ad factum praestandum recalled; interim interdict maintained

Orders

  • Recall of the interim order ad factum praestandum pronounced on 30 July 2010
  • Refusal of reclaiming motion insofar as it relates to recall of interim interdict pronounced on 11 August 2010