Caselaw Digest
Caselaw Digest

Ure Energy Limited v Notting Hill Genesis

14 October 2024
[2024] EWHC 2537 (Comm)
High Court
Two companies had a contract. One company (NHG) merged with another. The other company (URE) ended the contract and asked for a large payment. A judge decided that the merger gave the company (URE) the right to end the contract and get the payment, even though the company continued doing things under the contract for some time afterwards. The judge carefully looked at all the details and legal rules to reach this decision.

Key Facts

  • URE Energy Limited (URE) claimed a £3,946,861.56 contractual termination payment from Notting Hill Genesis (NHG).
  • The contract was for electricity supply and energy-saving measures.
  • URE claimed termination was justified due to NHG's amalgamation with another entity (Amalgamation Claim) or NHG's material breaches of the contract (Material Breaches Claim).
  • NHG argued URE waived its termination rights, the termination payment should be based on net profit (resulting in £0), and it wasn't in breach.
  • A prior summary judgment ruled that the amalgamation triggered a termination right but left the waiver question for trial.

Legal Principles

Waiver by election requires knowledge of the facts and the right to terminate, a decision to exercise or not, and clear communication of the choice.

The Kanchenjunga, Peyman v Lanjani

Constructive knowledge is insufficient for waiver; actual or blind-eye knowledge is required.

TCG Pubs Ltd v The Master and Wardens, The SK Challenger

A presumption arises that a party receiving legal advice was aware of its rights, but this presumption is rebuttable.

Peyman v Lanjani, Moore Large & Co. Ltd v Hermes Credit

A non-waiver clause does not entirely exclude the doctrine of waiver; however, it raises the threshold for demonstrating waiver.

MWB Business Exchange Centres Ltd v Rock Advertising Ltd, Sumitomo Mitsui Banking Corp Europe Ltd v Euler Hermes Europe SA NV

For a breach to be material, it must be serious and substantial, assessed based on the contract's terms, circumstances, and consequences.

Vivergo Fuels Ltd v Redhall Engineering Solutions Ltd

A repudiatory breach is only effective if accepted by the other party.

N/A (implied)

The proper construction of a contract clause should be determined before assessing whether it is a penalty clause.

Lewison, The Interpretation of Contracts

Outcomes

URE's Amalgamation Claim succeeds.

URE didn't waive its termination right because Mr. Ensor lacked knowledge of that right until after the purported termination.

URE's Material Breaches Claim fails.

NHG's breaches, while present, were not material enough to justify termination under the contract.

The contract was validly terminated by URE under clause 10.2(d) on 14 November 2018.

URE's initial termination notice was repudiatory but withdrawn before acceptance; the subsequent notice under clause 10.2(d) was valid.

URE is entitled to the termination payment of £3,946,861.56.

The 'remaining value' in clause 10.5 refers to anticipated future income, not net profit.

NHG's counterclaim largely fails.

Since URE's termination was valid, NHG's claim for damages due to URE's alleged repudiatory breach fails. Only the agreed credit balance of £156,000 is due to NHG.

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