Citation: [2024] EWHC 3417 (TCC)
Background
The Claimant (“IES”) commenced Part 8 proceedings against the Defendant (“BT”), following a prior, unsuccessful adjudication. The dispute concerned a series of contracts between the parties pursuant to which IES agreed to replace/renew/install telecommunication poles and provide related services for BT. In the adjudication, IES contended that BT had repudiated the contracts, that such repudiation had been accepted, and claimed damages in the sum of c£10m. BT disputed the claim and the adjudication was decided in BT’s favour.
IES sought Part 8 declarations concerning questions of interpretation, alleged repudiatory breach and damages, which were described by IES as a number of issues the court was asked to “finally determine” and three “final declarations”.
BT argued that the Part 8 procedure was unsuitable because: (i) IES had failed to follow the procedure in Cathay Pacific; (ii) the declarations sought needed to be made in the context of substantial disputes of fact (concerning interpretation, whether BT had repudiated the contracts, whether any such repudiation had been accepted by IES, and the question of damages); (iii) in any event, there was no agreed statement of facts, those relied on by IES had not been clearly identified (if at all) and such facts were unlikely to be short; (iv) the claim was ill-formed and imprecise; and (v) Part 7 statements of case would be more appropriate given the sums in dispute (c£10m), the complex contractual framework, the number of declarations sought, the lack of utility (the declarations being insufficient for payment), the factual disputes, the likely need for disclosure, BT’s desire to cross examine, the lack of precision, and the potential ramifications of deciding the meaning of a widely-used BT standard form contract in a vacuum.
Decision
The court directed that the case proceed as a Part 7 claim.
The court accepted the defendant’s arguments that it would be preferable for the court to make its determination based on fully pleaded statements of case, rather than risking an adverse decision without receiving relevant evidence. This point was particularly important because one of the declarations sought entailed interpreting a BT standard form, which was widely used. If the court made an adverse finding on this form without a proper investigation, there would be significant commercial consequences. Furthermore, and in any event, if the court made a determination on the issue of interpretation (only) it would not resolve matters between the parties because the claim would still need to be fully pleaded at a later stage. For these reasons the defendant was correct in asserting that the case should continue as a Part 7 claim.
The judgment can be found here.
