David Macbrayne Limited Against Atos It Services (uk) Limited
| Jurisdiction | Scotland |
| Judge | Lord Doherty |
| Neutral Citation | [2018] CSOH 32 |
| Date | 05 April 2018 |
| Docket Number | CA98/16 |
| Court | Court of Session |
| Published date | 05 April 2018 |
OUTER HOUSE, COURT OF SESSION
[2018] CSOH 32
CA98/16
OPINION OF LORD DOHERTY
In the cause
DAVID MACBRAYNE LIMITED
Pursuer
against
ATOS IT SERVICES (UK) LIMITED
Defender
Pursuer: Borland QC, Manson; Pinsent Masons LLP
Defender: Higgins QC, Massaro; CMS Cameron McKenna Nabarro Olswang L LP
5 April 2018
Introduction
[1] The pursuer is a ferry operator. It has a fleet of 33 ferries with which it operates
28 routes serving 24 islands within the Clyde and Hebrides areas. In addition to passengers,
the ferries carry cars, coaches, commercial vehicles, livestock, and goods. The defender
provides digital services.
[2] For about twenty years prior to 2013 the pursuer used a ticket and reservation
system (“Compass”) by agreement with a service provider. By 2013 Compass was viewed
by the pursuer as outdated and as not meeting its future business requirements and
aspirations. Accordingly, the pursuer embarked upon a public procurement exercise. On
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22 October 2013 it issued an Invitation to Tender (“ITT”) for the provision of a ferry
management ticketing and reservation back office managed service with integration
capability. That project was called Project Titan (“Titan”). Titan formed one part of a wider
business transformation programme which the pursuer envisaged would modernise its
business. One of the drivers for modernisation was that in late 2015/early 2016 the Scottish
Government was inviting tenders for the award of the contract to operate Clyde and
Hebrides Ferry Services for an eight year period from October 2016 (“CHFS2”). The other
projects in the wider programme were Digital Platform (“DP”), which would provide the
means by which the pursuer’s customers would interact online with the new ticketing and
reservations system; Veritas, which was a programme to collect and analyse information
input by customers and which could be used for future development of the pursuer’s
services; Valiant, which concerned the installation of a wi-fi infrastructure to provide
connectivity for vessels on all of the pursuer’s routes, however remote; Portunes, which was
an overhaul of the pursuer’s processes at harbours and the retraining of staff; and Argonaut,
which was a scheme to ensure collaboration and innovation from the pursuer’s staff through
the use of modernised technology. The defender was only involved in the delivery of Titan.
[3] On 20 December 2013 the defender submitted a Tender in response to the ITT. It
emerged initially as one of two preferred bidders, and latterly as the preferred bidder.
Between about April and August 2014 the pursuer and the defender discussed the terms of
the proposed Agreement. In particular, the pursuer’s Mr Ward and the defender’s
Mr Wright collaborated in order to prepare Part 2.1 of the Schedule to the Agreement. On
5 August 2014 the parties entered into the Agreement. The Agreement set out Milestones
which the defender was required to meet by specified Milestone Dates.
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[4] Significant delays occurred on the project. On 27 January 2015 the parties agreed to
vary Milestone Dates. In July 2015 they agreed to suspend performance of their obligations
under the Agreement. Thereafter, attempts to resolve their differences using the
Agreement’s dispute resolution procedure (culminating in a mediation in March 2016) were
unsuccessful. On 20 July 2016 the pursuer terminated the Agreement on the grounds of the
defender’s material breach.
[5] In this commercial action the pursuer seeks to recover damages from the defender
for breach of the Agreement. It maintains that the defender failed to achieve Milestone 7
(“M-7”) by the relevant Milestone Date, and that prior to that it had failed to achieve
Milestones 3, 4, and 5 (“M-3, M-4, and M-5”). The pursuer contends that as a result of the
defender’s breaches it was entitled to terminate the contract on 20 July 2016. In response the
defender maintains that any failures by it to achieve M-7 or the other Milestones were
caused by the pursuer’s breach of contract with the result that the defender was not in
breach at the relevant Milestone Dates or at the date of termination. If, contrary to the
defender’s primary position, it was in breach at the Milestone Dates, it does not accept that
any of the breaches entitled the pursuer to terminate the Agreement for cause in terms of
clauses 55.1 and 55.2; and it contends that even if the defender had been in such breach, the
pursuer failed to exercise the right to terminate within a reasonable time. It says that,
accordingly, the purported termination was wrongful and a material breach of the
Agreement. It has a counterclaim in which it which seeks (i) declarator that the purported
termination notice from the pursuer is invalid, and (ii) damages in respect of the pursuer’s
breach of the Agreement. The matter came before me for a proof before answer.
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