“Parties are ordinarily free to contract on whatever terms they choose and the court's role is to enforce them. There are exceptions and qualifications, but these too are part of the general law of contract. In Greer v Kettle Lord Maugham referred to fraud, illegality, mistake and misrepresentation. Similarly, just as a court may refuse in some circumstances to enforce a contract on grounds of public policy (a topic closely related to illegality), the same will apply to a contractual convention. … In short, contractual estoppels are subject to the same limits as other contractual provisions, but there is nothing inherently contrary to public policy in parties agreeing to contract on the basis that certain facts are to be treated as established for the purposes of their transaction, although they know the facts to be otherwise.”
“If the parties determine that Government Approval … is required but are unable to obtain the same on or before the Longstop Date … this Letter Agreement will automatically expire and the [December 2012 RTP] shall then form the only basis upon which [Rolls-Royce] shall be entitled to purchase the AM Package”
“If R-R acquires Initial Provisioning it shall purchase it from [Goodrich] at a price equal to IPC multiplied by Mark-Up.
“the provision of services comprising the maintenance, repair and overhaul of units, equipment and parts assembled, manufactured, supported or procured by JVC and the sale and supply of spare parts and initial provisioning ….”
“Q. And you accept as well, don’t you, that there are examples in the industry of pools of spare parts being offered by entities other than Rolls-Royce? A. Yes, yes, that’s correct. Q. And we know, for example, that Lufthansa Technik have for a long time been offering a component pooling service to their customers. Are you aware of that? A. Yes, that’s right. Q. So, their customers can access spare parts that way rather than buying them outright; yes? A. Yes, that's correct. Some of the pooling requires the operator to also hold the units. Lufthansa being an example of that, where Lufthansa Technik require the operator to also hold line side, but they support it with their own pool of units. Q. And you would accept that that arrangement would meet the definition of initial provisioning that you’ve set out in your witness statement? A. Yes, yes, it would.” iv) If the last part of that answer was intended to refer to the pooled units, as well as those held “line side”, it would not be at all consistent with the definition put forward in Mr Smith’s witness statement, and I do not think Mr Smith could have thought it was. The answer makes more sense if the answer is referring to the units the operator is required to hold, which is how I understood it at the time. v) Mr Loret did not claim to have direct knowledge of an industry meaning of the term, but gave evidence of his own understanding “based on discussions I have had over the years both with customers and [unidentified] Rolls-Royce colleagues who sold aftermarket services to customers”, which understanding he said he believed “was shared within Rolls-Royce and by customers”
“[T]he IP credits are bundled into the TotalCare when the engine is selected, so that includes the TotalCare baseline, the purchase of engine and all the other options, so the sales director just present a deal which is suitable to the customer and can use IP credit if it’s something the customer really wants as long as the total return of the TotalCare is within the approved level”. ii) The “Parts Availability Generic Business Case” of3 October 2016 stated “on almost every [sales] campaign we are being challenged to provide a service which removes the need for buying IP … Without credits customers will buy LRUs direct from OEM” (original equipment manufacturer). iii) A later presentation quoted a customer as stating, “large operators can negotiate large discounts at time of engine buy, are not capital constrained and can achieve scale on their own”
“On any R-R Engine Programme, if at the time when a Customer purchases Initial Provisioning any such Customer is granted the right to sell back surplus Initial Provisioning to either [the RR Entities] or [Goodrich], then the Party which granted such right shall purchase back such surplus Initial Provisioning …”
“It is impossible to see why the parties would have intended that, for example: (i) Spares ordered separately by British Airways and Iberia in support of the operation of their respective fleets would count as [Initial Provisioning]; but (ii) those same Spares ordered on a consolidated basis by International Airlines Group (which owns both airlines) to support their fleets would not ….”
“Damages for breach of contract depend on considering the outcome if the contract had been performed, whereas an award based on a hypothetical release fee depends on considering the outcome if the contract had not been performed but had been replaced by a different contract”
“78. It is therefore of critical importance to construe the contract in order to identify the obligation of which the defendant is in breach. In the present case the obligation in clause 6.4(1) was to maintain a Delivery Capacity of 130% of the TRDQ in circumstances where it was known that the TRDQ would change over the period of the Agreements and, in particular, that the Sellers had a right in some circumstances (but never a duty) to serve a Variation Notice to reduce the TRDQ after the expiry of the Minimum Plateau Period. On any given day it is a straightforward matter to ascertain what capacity the Sellers are obliged to maintain. All that is necessary is to ask what is the current TRDQ and to multiply that by 130%. To construe the contract in this way promotes certainty and clarity. In contrast, to construe the contract as requiring the Sellers to predict the maximum capacity they will be able to maintain in 2 ½ to 3 years' time, and to serve Variation Notices to adjust the TRDQ accordingly, is far from straightforward, as well as having the effect of converting a right into a duty. 79. In those circumstances the Sellers' obligation, in my judgment, was to maintain a Delivery Capacity of 130% of whatever the TRDQ was from time to time. They were under no obligation to serve a Variation Notice with a view to reducing the TRDQ in the event that they foresaw a future inability to comply with that obligation. Damages cannot be assessed as if they were under an obligation to serve such a notice: to do so would be contrary to the terms of the parties' contract. Nor can damages be assessed on the basis that the Sellers would in fact have served a Variation Notice when in fact they did not. 80. Accordingly, the relevant counterfactual for the purpose of assessing damages is that the Sellers would have maintained a Delivery Capacity of 108.43 TJ/day. This is in accordance with the fundamental principle that damages must be assessed on the basis that the party in breach had performed its obligation. On this basis, British Gas has suffered no loss. In contrast, British Gas seeks to assess damages on a different (and in my judgment wrong) principle, namely that the party in breach would have taken steps to avoid being in breach of contract in the first place.”
“[The Judge] was correct to proceed on the basis that it was not sufficient to conclude, without more, that in the absence of breach the Cargo would initially have remained on board the Vessel. It was necessary to ask what would have happened next. The loss claimed by the Bank was that discharge without production of the Bill prevented the Bank from being able to enforce its security interest against the Cargo in Owners’ hands so as to recoup the lending which Gulf did not repay. This can, in my view, properly give rise to a claim where, as is usual, the financing bank expects discharge without presentation of the bill against an LOI as part of the financing arrangements (c.f Fimbank Plc v Discover Investment Corp (The Nika)[2020] EWHC 254 (Comm) [2021] 1 Lloyd’s Rep 109 at [34]). Nevertheless, to establish causation, it was for the Bank to show, on the balance of probabilities, that in the event of performance by Owners, it would have enforced its security against the Cargo so as to recoup its lending. Otherwise, the breach was not an effective cause of any loss: the failure to recoup the lending to Gulf would have occurred in any event, irrespective of the breach by Owners in delivering without Judgment Approved by the court for handing down. Double-click to enter the short title production of the Bill. The causation defence required an assessment of what would have happened to the Bank’s security interest had Owners initially refused to discharge without production of the Bill. That was indeed the inquiry which both parties invited the Judge to undertake, and which she undertook.”
“As Mr Russell was inclined to accept, the obligation to deliver against a bill of lading is a contractual one which can be varied by express consent to the contrary. On the Judge’s findings, had Owners initially complied with the obligation not to discharge without production of the Bill, what would have happened in practice is that they would have sought and obtained express consent to do so from both the holder and intended indorsee, who brings the present claim. In those circumstances delivery without production of the Bill would no longer have been a breach of the Bill contract. The initial breach would therefore have caused no loss.”
“Rolls-Royce must pay a price equal to IPC multiplied by the mark-up rate of 4.3 for any Initial Provisioning Spare Units that they acquire above a limit for each Unit type equal to 25% …”
“In breach of clause 11.1 of the ECSURS, the RR Entities failed to specify and pay the correct price for the Units acquired”
“If one were to ask what would have happened if the particular breach that is alleged – the ‘assertion’ of allegedly incorrect prices in Spares Orders – had not occurred, there are two possibilities: either (i) the ‘assertions’ in the Spares Orders would have been different (i.e. a different price would have been specified; or (ii) the ‘assertions’ would not have been made at all (i.e. the Spares Orders would not have been sent).”
“… Damages must be assessed on the basis that the party in breach had performed its obligations … In contrast British Gas seeks to assess damages on a different (and in my judgment wrong) principle, namely that the party in breach would have taken steps to avoid being in breach of contract in the first place”