Rhodia International Holdings Ltd and Another v Huntsman International
| Jurisdiction | England & Wales |
| Judge | Lord Justice Ward,Lord Justice Moore-Bick |
| Judgment Date | 11 June 2007 |
| Neutral Citation | [2007] EWCA Civ 621 |
| Date | 11 June 2007 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2007/0542 |
[2007] EWCA Civ 621
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE,
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JULIAN FLAUX QC)
Lord Justice Ward and
Lord Justice Moore-Bick
Case No: A3/2007/0542
MR A EDWARDS-STUART QC (instructed by Messrs Dickinson Dees LLP) appeared on behalf of the Appellant.
THE RESPONDENT DID NOT APPEAR AND WAS NOT REPRESENTED.
The applicant in this case, Huntsman, entered into a sale and purchase agreement (“the SPA”) dated 27 February 2001 for the purchase of some of the business operations of the respondent Rhodia at a site in Whitehaven, Cumbria. The SPA contemplated the various contracts related to the business would be novated to Huntsman or its subsidiary. One such contract was an energy supply contract (“the energy contract”) between Rhodia and National Power (CoGeneration) Ltd (“Cogen”). That contract was a restrictive contract as defined in the agreement which require consent before it could be novated. Clause 15 of the SPA dealt with the parties' obligations in that regard. Clause 15.1.2 imposed on Huntsman a qualified obligation to use reasonable endeavours to obtain Cogen's consent to a novation of the energy contract. Mr Julian Flaux QC sitting as a deputy judge at the High Court was to find that Huntsman was in breach of that obligation and there is no appeal against that finding. Clause 15.1.4 provided that in defined circumstances Huntsman could give notice to Rhodia to exclude the energy contract from the sale but the judge held that the notice in fact served was invalid and again there is no appeal from that finding. This application for permission to appeal by Huntsman relates to the judge's order made on 21 February 2007 that Huntsman remained under the obligation on or after 5 March 2004 pursuant to clause 15.1.3(b) to perform Rhodia's obligations under the energy contract.
It is not quite clear how much turns upon that finding but the figures may well exceed £10 million, so is a substantial claim. Huntsman seek to appeal the judge's construction of that clause. The clause is set out on page 5 of the judgment and reading it selectively it provides that subject to and “with effect from Completion”:
“(b) Unless the relevant Restricted Contract…prohibits it, the Purchaser [Huntsman] shall,…perform all the obligations of RCSL [Rhodia] under such Restricted Contract…as agent for or sub-contractor to RCSL [Rhodia], but at Purchaser's [Huntsman's] expense.”
Clause 15.1.3(c), if I can paraphrase that, no doubt inelegantly, provides in effect that where delegation is prohibited and the consent is not forthcoming then Rhodia have to continue to service the energy contract.
The other relevant clause is clause 24.6 of the energy contract to be found on page 27 of the judgment, which provides for sub-contracting in these terms:
“Either Party shall have the right to sub-contract or delegate the performance of any of its obligations and duties arising under this Contract with the prior consent of the other, such consent not to be unreasonably withheld.”
It appears to have been common ground, says Mr Edwards-Stuart QC for the applicant, that clause 24.6 did not allow Rhodia to sub-contract or delegate the performance of any of its obligations or duties under the...
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