Ohpen Operations UK Ltd v Invesco Fund Managers Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell DBE,Mrs Justice O'Farrell |
| Judgment Date | 16 August 2019 |
| Neutral Citation | [2019] EWHC 2246 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-000137 |
| Date | 16 August 2019 |
[2019] EWHC 2246 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
The Rolls Building,
Fetter Lane, London, EC4A 1NL
Mrs Justice O'Farrell DBE
Case No: HT-2019-000137
Mr Matthew Parker (instructed by Bryan Cave Leighton Paisner LLP) for the Claimant
Mr Fionn Pilbrow QC (instructed by Herbert Smith Freehills LLP) for the Defendant
Hearing dates: 18 th July 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The issue before the court is whether the claim has been issued in breach of a contractually agreed tiered dispute resolution procedure and, if so, whether these proceedings should be stayed, pending referral of the dispute to mediation.
Background to the dispute
By a framework agreement dated 1 July 2016 (“the Agreement”), the defendant (“Invesco”), an investment manager, engaged the claimant (“Ohpen”) to develop and implement a digital online platform through which Invesco's retail customers could buy and sell investments in funds offered by Invesco for an initial term of eight years.
The Agreement provided that during the period between the effective date of the Agreement of 1 July 2016 and the launch of the platform (“the Development and Implementation Phase”):
i) the parties would agree the requirements for the platform and its implementation, which would be set out in a Development and Implementation Plan (“the DIP”);
ii) Ohpen would develop and deliver the platform in accordance with the DIP; and
iii) Invesco would pay Ohpen an implementation fee of £75,000 per month.
Following the launch of the platform (“the Commencement Date”), Ohpen would operate the platform, which would process transactions and provide administration, reporting and other services, the Business Process Outsourcing (“BPO”) services, and Invesco would pay Ohpen service charges.
The Agreement provided that the Commencement Date would be 1 March 2017, subject to any agreed extensions. Delays occurred and the Commencement Date was not achieved. There is a dispute as to responsibility for the delays and the revised Commencement Date agreed by the parties.
By letter dated 11 October 2018 Invesco issued a notice of termination on the grounds of (incurable) material breach and/or repudiatory breach.
By letters dated 16 October 2018 and 22 November 2018 Ohpen disputed any material and/or repudiatory breach, disputed the validity of Invesco's purported termination and purported to accept Invesco's repudiatory breach.
Thus, both parties agree that their primary obligations under the Agreement have been terminated. There is a dispute as to which party was in material and/or repudiatory breach of contract. The competing arguments are set out in the witness statements of David Phillips, solicitor for Invesco, dated 24 May 2019 and Oliver Glynn-Jones, solicitor for Ohpen, dated 28 June 2019.
At the end of January 2019 the parties attended a “without prejudice” meeting to attempt to resolve the dispute but no settlement was concluded.
On 20 February 2019 Ohpen sent a letter of claim.
On 23 April 2019 Ohpen issued these proceedings, claiming damages of £4.7 million arising from Invesco's alleged wrongful termination. Invesco has intimated a counterclaim in the sum of approximately £5.7 million.
On 24 May 2019 Invesco issued this application seeking:
i) a declaration that the Court will not exercise any jurisdiction it may have to hear the claim filed by Ohpen; and
ii) an order for a stay of the claim pending compliance with the contractually agreed dispute resolution procedure.
Mr Pilbrow QC, counsel for Invesco, submits that clause 11 of the Agreement is a valid, binding and applicable alternative dispute resolution clause, which prescribes a mandatory escalation and mediation procedure prior to the commencement of proceedings. Ohpen has commenced these proceedings in breach of that provision. In those circumstances, the Court should exercise its discretion to stay the proceedings to give effect to the procedure agreed by the parties.
Mr Parker, counsel for Ohpen, opposes the application on the ground that, as a matter of construction of the Agreement, the relevant dispute resolution provisions are not applicable outside the Development and Implementation Phase or following termination of the Agreement. The Agreement has been terminated by Ohpen or Invesco. It follows that the provisions are no longer binding on the parties.
The Agreement
Clause 3.5 states:
“Parties will jointly agree in writing on the contents of the Development and Implementation Plan within a period of two (2) months after the Effective Date… Ohpen will manage the process of drafting the Development and Implementation Plan for approval by Client and when Parties agree on its contents, it shall be signed by Parties and attached to this Agreement as Schedule 4 (Development and Implementation Plan) (“Agreed Development and Implementation Plan”). Ohpen will thereafter manage the execution and delivery of the Agreed Development and Implementation Plan in accordance with the agreed planning, deliverables and dependencies (including any agreed actions to be executed by Client and Rplan) set out in the Agreed Development and Implementation Plan.
…
The date after the signature date on which the last Party has signed off the Development and Implementation Plan is considered to be the Commencement Date of the BPO Services, unless Parties agreed to a specific and different commencement date of such BPO Services.”
Clause 3.6 states:
“During the Development and Implementation Phase, Ohpen will carry out the Implementation Services in order to meet its obligations resulting from the agreed Development and Implementation Plan. Ohpen shall have an autonomous responsibility to plan its resources in such a way that the milestones derived from the Development and Implementation Plan shall be met in time. An Implementation Fee as described in Schedule 3 (Pricing) shall apply to Client from the Effective Date.
…
Any disputes about or arising out of delays shall be resolved through the Dispute Procedure as described in clause 011.1.1 and 11.1.2. Pending the resolution of the dispute, the parties shall continue to work together to resolve the causes of, and mitigate the effects of, the delay.”
Clause 3.8 states:
“As of the Commencement Date, Ohpen shall perform the BPO Services in accordance with all elements of this Agreement, but specifically in accordance with the Service Level Agreement for Client and Client's (prospective) Customers…”
Clause 11 is entitled “Dispute Resolution” and provides as follows:
“11.1 Internal Escalation
11.1.1 The Parties will first use their respective reasonable efforts to resolve any Dispute that may arise out of or relate to this Agreement or any breach thereof, in accordance with this Clause 0. If any such Dispute cannot be settled amicably through ordinary negotiations within a timeframe acceptable to Client and Ohpen, either Party may refer the Dispute to the Contract Managers who shall meet and use their reasonable efforts to resolve the Dispute.
11.1.2 During the Development and Implementation Phase, any disputes shall firstly be handled by the persons as described in Clause 22.1. If such escalation does not lead to resolution of the Dispute, then the Dispute shall be escalated to the executive committees of respectively Client and Ohpen. If escalation to the executive committee does not lead to resolution of the Dispute, then the Dispute shall be referred for resolution to mediation under the Model Mediation Procedure of the Centre of Dispute Resolution (CEDR) for the time being in force. If the Parties are unable to resolve the Dispute by mediation, either Party may commence court proceedings.
11.1.3 If any such Dispute that arises after Commencement Date is not resolved by the Contract Managers within ten (10) Business Days after it is referred to them, either Party may escalate the Dispute through the hierarchy of the committees, as set out in the chapter on governance of Schedule 2 (Service Level Agreement), who will meet and use their respective reasonable efforts to resolve the Dispute.
11.1.4 Ohpen shall continue to provide the Services and to perform its obligations under this Agreement notwithstanding any Dispute or the implementation of the procedures set out in this Clause. Client's payment obligations that are listed in Schedule 3 (Pricing) shall not be halted during the resolution of any Dispute.
11.2 Jurisdiction
If a Dispute is not resolved in accordance with the Dispute Procedure, then such Dispute can be submitted by either Party to the exclusive jurisdiction of the English courts.
11.3 Urgent Relief
Nothing contained in Clause 11.1 shall restrict either Party's freedom to commence summary proceedings to procure or ensure performance of obligations and/or any required action to prevent further damages, preserve any legal right or remedy or to prevent the misuse of any of its Confidential Information.”
Dispute is defined in Schedule 1 as:
“a dispute or failure to agree.”
Dispute Procedure is defined in Schedule 1 as:
“the procedure for resolving Disputes contained in Clause 11 of the Agreement.”
Contract Manager is defined in Schedule 1 as:
“The employee of Ohpen and Client respectively appointed as a contract manager in accordance with the chapter on governance of Schedule 2 (Service Level Agreement).”
Clause 20.5.2 states:
“Termination of this Agreement will not affect any accrued rights or...
To continue reading
Request your trial
-
IS Prime Ltd v TF Global Markets (UK) Ltd
...Mineral Exports Private Ltd [2014] EWHC 2104 (Comm), [2015] 1 WLR 1145 and Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC), [2020] 1 AER (Comm) 7786 would be applied if, contrary to Section 7.7, ISRA had brought suit against Think, or Think had done so against ......
-
Victor Victorovich Plekhanov v Alexey Andreyevich Yanchenko
...takes seriously the requirements of informal dispute resolution — as is plain from the judgment of O'Farrell J in Ohpen v Invesco [2019] EWHC 2246 (TCC) (to which Mr Scott very properly drew my attention) — there are questions over whether this clause is clear enough to be enforced, and wh......
-
Complex Commercial Litigation Law Review – England and Wales
...1503 (Comm).33 AMT Futures Limited v. Karim Boural [2018] EWHC 750 (Comm).34 Ohpen Operations UK Ltd v. Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC).35 Fiona Trust and Holding Corporation and another v. Privalov and others [2007] EWCA Civ. 20 and see also Fiona Trust and Holding Corpora......
-
Complex Commercial Litigation Law Review - Fifth Edition - England & Wales
...EWHC 1503 (Comm)33 AMT Futures Limited v. Karim Boural [2018] EWHC 750 (Comm).34 Ohpen Operations UK Ltd v. Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC).35 Fiona Trust and Holding Corporation and another v. Privalov and others [2007] EWCA Civ. 20. See also Fiona Trust and Holding Corpor......
-
TIERED DISPUTE RESOLUTION CLAUSES - why you should use them and how to make sure they work
...Teare J in Emirates Trading Agency LLC v Prime Mineral Exports Pte Ltd [2014]EWHC 2104 at para 64[3] See para 52 of judgment[4] [2019] EWHC 2246 (TCC)[5] Centre of Dispute Resolution – a leading ADR service provider in London specialisingin the resolution of conflict deadlock[6] Note that i......
-
English High Court Provides Useful Guidance On The Requirement To Notify A Claim As Soon As Possible In Rejecting An Indemnity Claim Under An SPA
...Y M'r Offshore Wind Farm Ltd [2020] EWHC 850 (Comm). 2 See, for example, Ohpen Operations UK Limited v Invesco Fund Manager Limited [2019] EWHC 2246 (TCC). 3 [2020] EWHC 984 4 Towergate Financial Group v Clark [2017] EWHC 2330 (Comm) and Hopkinson & Ors v Towergate Financial (Group) Ltd & O......
-
Table of cases
...OF CaSES Ohbayashi-Gumi Ltd v Kian hong holdings pte Ltd [1987] SLr 94 II.6.203 Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWhC 2246 (TCC) III.23.17, III.23.42 Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWhC 2504 (TCC) III.26.282 Oil Basins Ltd v Bhp Billiton......
-
Dispute resolution
...Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709 at 715, per Giles J; Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC) at [43], per O’Farrell J. 66 See, eg, the American Arbitration Association’s “Construction Industry Arbitration Rules and Mediation Proce......
-
Mediation and Appropriate Dispute Resolution
...[2014] 1 SLR 130; Ling Kong Henry v Tanglin Club [2018] 5 SLR 871 at [25]; and Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC). 20 [2021] SGHCR 9. 21 EXXA Network Pte Ltd v SQ2 Fintech Pte Ltd [2021] SGHCR 9 at [3]. 22 EXXA Network Pte Ltd v SQ2 Fintech Pte Ltd [2......