Aston Martin Lagonda Ltd v Premier International Motors Group Company W.L.L.

Hearing dates: 4, 5, 6, 7, 8, 11, 12 and 14 December 2023

Approved Judgment

This judgment was handed down remotely at 10.30am on 19 February 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Ms Lesley Anderson KC SITTING AS A DEPUTY JUDGE OF THE HIGH COURT

Lesley AndersonKC:

Introduction

The Claimant, Aston Martin Lagonda Limited ( AML), is an English manufacturer of luxury cars including, as its name implies, those under the Aston Martin ( AM) brand. The historic home of Aston Martin is in the English town of Newport Pagnell, near Milton Keynes.

The Defendant, Premier International Motors Group Co. W.L.L. ( PIMG) is a company incorporated and registered under the laws of Kuwait with company number 114314 and its principal office is at Arraya Tower, Kuwait. PIMG was appointed by a dealer agreement dated 19 February 2009 to import, sell and service new and used AM cars and parts in Kuwait. PIMG is owned by Pegasus Automotive Group Holding ( Pegasus) which also owns Regional Steps Trading LLC ( RST), a company incorporated under the laws of the United Arab Emirates ( UAE), which was appointed by a dealer agreement dated 12 December 2012 to import, sell and service new and used AM cars and parts in the UAE. Pegasus is a wholly owned subsidiary of Al-Roumi Capital Holding Co. ( Al Roumi Capital) which is owned by The Al-Roumi Group ( ARG), the ultimate holding company of which is Al-Roumi Group Holdings Company, a Kuwaiti corporate group which is owned and controlled by the family of Rezam Al-Roumi ( Mr Al Roumi).

Aston Martin Works Limited ( AMW), is a company incorporated in England and Wales, which also operates from Newport Pagnell. AMW is indirectly owned as to 50% by AML and as to the other 50% by Bespoke Limited ( Bespoke), a company incorporated in Jersey, which is owned by Al Roumi Capital. AMW specialises in the sale and restoration of AM heritage vehicles (which is what this case is largely about) but its business also includes the sale of new AM vehicles including continuation cars (new vehicles which, according to AMW's web-site, are produced to emulate earlier models which combine the authenticity of the original era cars but with a sympathetic application of modern engineering and performance advancements ( Continuation Cars)) and the servicing, repair and engine building of vehicles.

For completeness, it is convenient also to note that Aston Martin MENA Limited ( AMMENA), is a Jersey incorporated company which was appointed by AML as its exclusive distributor of new and used AM vehicles and parts in the Middle East, North Africa and Turkey region ( MENA) pursuant to a distribution agreement dated 19 April 2018. AMMENA is ultimately owned and controlled by ARG. AMMENA has brought separate proceedings in the Commercial Court against AML (including for sums alleged to be due under that agreement) the trial of which concluded as recently as 23 November 2023 and in respect of which judgment was handed down on 20 December 2023: [2023] EWHC 3285 (Comm). I was also told that there is an ongoing shareholder dispute in Jersey concerning AMW's immediate parent company (which is owned 50% by representatives of AML and 50% by representatives of the ARG) and that AML and AMMENA are engaged in arbitration proceedings in relation to other disputes under the distribution agreement. It is perhaps sufficient to say that the cordial commercial relationship which once existed between the parties is now very strained.

The present proceedings concern two written contracts for the sale of 33 heritage AM vehicles or, as the parties generally refer to them, the Barter Vehicles ( the Heritage Vehicles). I will return to their precise terms, meaning and effect later in this judgment. First, there is a written agreement between AML and PIMG (and acknowledged by RST and AMW) dated 21 December 2015 ( the 2015 Agreement) for the sale of 8 Heritage Vehicles ( the 2015 Heritage Vehicles) and the repayment of the debts then owed by PIMG and RST to AML. Secondly, there is a written agreement between AML and PIMG dated 30 December 2016 ( the 2016 Agreement) for the transfer to AML of 25 Heritage Vehicles ( the 2016 Heritage Vehicles) in consideration of AML issuing a credit note ( Credit Note) to PIMG, and for the subsequent sale of certain special cars ( Special Cars).

In summary, AML claims that, after taking account of the proceeds of sale of the Heritage Vehicles and agreed offset sums, there is a shortfall due to it under the 2015 Agreement of £1,721,361.51 ( the 2015 Shortfall) and £5,724,953.34 under the 2016 Agreement ( the 2016 Shortfall) and that it is entitled to recover £93,253.05 in storage costs ( the Storage Costs) in connection with the sale of the vehicles. PIMG denies that AML is entitled to the 2015 Shortfall or the 2016 Shortfall or to the Storage Costs and contends, in short, in its defence and counterclaim, that no shortfall would have arisen but for AML's breaches of its obligations under the 2015 Agreement and the 2016 Agreement and that it is entitled to set-off its claims for damages for those breaches and/or for conversion of the 2015 Heritage Vehicles under the Torts (Interference with Goods) Act 1977 ( TIGA 1977) and/or that any sums found to be due are to be deducted under the Credit Note.

I have been assisted by detailed written skeleton arguments and helpful written and oral submissions from Counsel for both parties. I am grateful to them for the way in which they assisted me during the trial.

The Heritage Vehicles

According to an extract from Octane Classic Car Price Guide produced by one of the experts: “ Lionel Martin and Robert Barnford built the first Aston Martin in 1914, the ‘Aston’ coming from the Aston Clinton Hillclimb. From this small acorn grew one of Britain's best-loved sports car marques. The golden era for the manufacturer began in 1948 when industrialist David Brown took over; the iconic DB series cars were fast, beautiful, desirable and expensive. After Brown sold up in 1972, Aston Martin had a number of owners while the long-lived V8 range kept the firm afloat. Ford's takeover in 1987 led to a period of stability and new models such as the DB7 and Vanquish. In 2014, a partnership with Mercedes-AMG was announced, the first fruit of which was the all-new DB11”.

It is important to note that the AM range is wide comprising different series of vehicles: including the DB4, the DB5, the DB6 (the DB being derived from David Brown as I have already noted) and that within each series there are often different specifications (such as Mark 1, Mark 2 and the Vantage and the Volante).

The 2015 Agreement concerns 8 vehicles which were listed in Schedule 2: (1) a DB6 saloon with chassis or VIN number DB6/2435/L [Vehicle 4]; (2) a DB4 Series IV with chassis number DB4/986/R [Vehicle 2]; (3) a DB4 saloon with chassis number DB4/144/L [Vehicle 6]; (4) a DB4 saloon with chassis number DB4/566/L [Vehicle 12]; (5) a DB6 Mk II with chassis number DB6MK2/4289/R [Vehicle 19]; (6) a DB6 saloon with chassis number DB6/3425/LC [Vehicle 33]; (7) a DB5 saloon with chassis number DB5/1892/L [Vehicle 5] and (8) a DB6 Mk II saloon with chassis number DB6/3030/R [Vehicle 1]. Accordingly, there were 4 DB6 series cars, 3 DB4 series cars and one DB5 series car.

The 2016 Agreement concerns 25 vehicles identified in Appendix 1 to the Agreement: (1) a DB6 Mk 2 Volante with chassis number DB6MK2VC/3768/R [Vehicle 20]; (2) a DB6 Mk 2 Vantage with chassis number DB6MK2/4184/VC [Vehicle 30]; (3) a DB6 Mk 2 with chassis number DB6MK2/4316/R [Vehicle 11]; (4) a DB6 Mk 2 Volante with chassis number DBMK2VC/3774/R [Vehicle 21]; (5) a DB6 Mk 2 with chassis number DB6MK2/4135/R [Vehicle 24]; (6) a 1987 V8 Vantage with chassis number L12563 [Vehicle 16]; (7) a 1963 DB4 with chassis number DB4/1182/L [Vehicle 23]; (8) a 1958 DB4 Series 1 with chassis mark DB4/106/L [Vehicle 10]; (9) a 1961 DB4 Series IV with chassis number DB4/790/L [Vehicle 18]; (10) a 1970 DB6 Mk 2 Vantage with chassis number DB6MK2/4256/R [Vehicle 22]; (11) a 1989 V8 Volante Prince of Wales with chassis number R15733 [Vehicle 14]; (12) a 1958 DB2/4 Mk III Convertible with chassis number AM300/3/1522 [Vehicle 28]; (13) a 1968 DB6 Volante with chassis number DBVC/3675/R [Vehicle 31]; (14) a 1970 DB6 Mk 2 Vantage with chassis number DB6MK2/4271/R [Vehicle 25]; (15) a 1962 DB4 Series IV with chassis number DB4/850/L [Vehicle 8]; (16) a 1967 DB6 Volante with chassis number DBVC/3617/R [Vehicle 26]; (17) a 1959 DB4 Series 1 with chassis number DB4/162/L [Vehicle 13]; (18) a 1962 DB4 Series IV Convertible with chassis number DB4C/1058/L [Vehicle 3]; (19) a 1959 DB2/4 Mk III Convertible with chassis number AM/300/3/1403 [Vehicle 32]; (20) a 1967 DB6 Volante with chassis number DBVC/3611/R [Vehicle 29]; (21) a 1970 DB6 Mk II Volante with chassis number DB6MK2VC/3762/R [Vehicle 15]; (22) a 1961 DB4 Series II with chassis number DB4/368/L [Vehicle 9]; (23) a 1959 DB 4 Series 1 with chassis number DB4/168/L [Vehicle 17]; (24) a 1968 DB6 Volante with chassis number DBVC/3682/R [Vehicle 27] and (25) a 1967 DB6 Volante Vantage with chassis number DBVC/3660/R [Vehicle 7]. As can be seen, there was a...