Outotec (USA) Inc & Anor v MW High Tech Projects UK Limited
[2024] EWCA Civ 844
MW High Tech Projects UK Limited v Outotec (USA) Inc & Ors
17 November 2023
[2023] EWHC 2885 (TCC)
High Court
A company (MW) sued another (Outotec) and its parent company (Metso) for a botched project. The court threw out the main contract claim because of a technicality. However, the court let the company pursue a claim of being tricked into the project itself.
Key Facts
- •MW High Tech Projects UK Limited (MW) brought a substantial claim against Outotec (USA) Inc (Outotec) and Metso Oyj (Metso), Outotec's parent company.
- •The claim included breach of contract and misrepresentation, stemming from a subcontract for the Hull waste-to-energy project.
- •Metso provided parent company guarantees for Outotec's liabilities.
- •The Hull project was terminated, and EWH (Energy Works Hull Limited) assigned the subcontract to itself.
- •EWH later reassigned the subcontract to MW.
- •MW previously had litigation with Outotec, resulting in Outotec winning a judgment.
- •The current claim comprises a misrepresentation claim (around £170 million) and a breach of contract claim (around £122 million).
Legal Principles
Contract construction principles
DnaNudge Limited v Ventura Capital GP Limited [2023] EWCA Civ 1142
Conditional benefit principle in contract assignment
Budana v Leeds Teaching Hospitals NHS Trust [2017] EWCA Civ 1980; Chitty on Contracts
Abuse of process (Henderson abuse)
Johnson v Gore Wood & Co [2002] 2 AC 1; Aldi Stores Limited v WSP Group plc [2007] EWCA Civ 1260
Guarantee construction principles
National Merchant Buying Building Society Ltd v Bellamy [2013] EWCA Civ 452
Construction of arbitration clauses regarding misrepresentation claims
Ashville Investments Ltd v Elmer Contractors Ltd [1989] QB 488; Strachan & Henshaw Ltd v Stein Industrie (UK) Ltd
Outcomes
MW's breach of contract claims against Outotec summarily dismissed.
The re-assignment of the subcontract from EWH to MW was ineffective due to lack of prior consent from Outotec, as per clause 9.1 of the subcontract.
MW cannot pursue breach of contract claims against Metso under the parent company guarantee.
The guarantee covers Outotec's failures under the subcontract; the assignment to EWH transferred the right to performance to EWH, leaving MW with no claim against Metso for breach of contract post-assignment.
MW can pursue the misrepresentation claim against Metso under the parent company guarantee.
The misrepresentation claim falls within the scope of the guarantee, and striking out the claim against Outotec for abuse of process doesn't bar a claim against Metso unless the claim against Metso is also abusive.
Misrepresentation claims against both Outotec and Metso are not struck out as an abuse of process.
While MW failed to comply with the Aldi guidelines by not raising the misrepresentation claim in the prior proceedings, other factors, such as the lack of significant overlap between the claims and the existence of other similar claims against Outotec and Metso, prevent this from amounting to an abuse of process.
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