Salt Ship Design as v Prysmian Powerlink Srl
| Jurisdiction | England & Wales |
| Judge | David Edwards |
| Judgment Date | 02 September 2019 |
| Neutral Citation | [2019] EWHC 2308 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2018-000474 |
| Date | 02 September 2019 |
[2019] EWHC 2308 (Comm)
David Edwards, QC (SITTING AS A JUDGE OF THE HIGH COURT)
Case No: CL-2018-000474
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Tim Austen (instructed by Holman Fenwick Willan LLP) for the Claimant
Henry Byam-Cook (instructed by Wikborg Rein LLP) for the Defendant
Hearing dates: 31 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.
David Edwards, QC (sitting as a Judge of the High Court):
Introduction
The present application is an application by the Claimant (“Salt”), made under CPR Part 17.1(2), for permission to amend its Particulars of Claim.
Salt's currently pleaded claim is for damages for breach of contract, the contract in question being a written Short Form Agreement concluded on 13 July 2017 (“the Contract”) under the terms of which Salt agreed to provide ship design services to the Defendant (“Prysmian”) in relation to a proposed cable laying vessel.
By its proposed amendments, Salt seeks to add:
i) A claim for breach of confidence concerning the alleged misuse by Prysmian of what is referred to in the draft Amended Particulars of Claim as Restricted Know-How owned by Salt;
ii) A claim for unlawful means conspiracy, the unlawful means alleged being (a) the originally alleged breach of contract, and (b) the proposed new plea of breach of confidence; and
iii) A claim for exemplary damages, which it was confirmed during the hearing before me was intended to apply only to the proposed breach of confidence and unlawful means conspiracy claims.
Salt also seeks to add claims for additional remedies, including an injunction and an inquiry as to damages.
Prysmian resists the proposed amendments. It submits, in broad summary, that:
i) The proposed amendments are “very late”, in the sense that they would cause the currently fixed trial date of 14 January 2020 to be lost;
ii) The draft Amended Particulars of Claim, in the way in which they deal with the new matters, are defective or exhibit a lack of clarity in certain respects;
iii) The proposed amendments also do not pass the merits threshold, either the ordinary threshold, i.e., that they have reasonable prospects of success, or what is said to be the heightened threshold applicable in the case of very late amendments.
All three matters, it was suggested, caused Prysmian prejudice. Prysmian submits that:
iv) The overall balance of injustice – the injustice to Salt if the proposed amendments were refused and the injustice to Prysmian and to litigants in general if the amendments were allowed – points in favour of permission to amend being refused.
Factual Background
Salt is a relatively small Norwegian ship design company. Prysmian is a member of a substantial Italian multinational corporation that carries on business in power transmission and telecommunications cables and their installation.
On 13 July 2017 Salt and Prysmian entered into the Contract under the terms of which Salt agreed to provide ship design services to Prysmian in relation to a proposed new cable laying vessel. Salt was referred to in the Contract as the “Designer” and Prysmian as the “Client”.
Clause 1.1 of the Contract explained that its purpose was as follows:
“ 1.1 Purpose
For the purpose of developing a Vessel type (the ‘Project’ or the ‘Vessel’), Client (the ‘Client’) has the firm intention to build a Vessel based on a design by XXX (the ‘Designer’). The Client appoints the Designer as the exclusive designer for the Project and the Designer grants the Client the right to build the Vessel based on a Designer's developed ship design package and under terms as set out in this Contract.”
The term “Project” was defined at the beginning of the Contract as follows:
“ Project: means the planned collaborative enterprise to achieve the Design of Prysmian New Build cable laying vessel.”
The term “Design” was defined to mean:
“ Design: means all drawings, specifications and other documentation that will be produced by The Designer for this Project.”
The Contract, as originally concluded, provided in clause 1.2 that Salt would perform the contracted design work in four phases, details of the work (or “Scope of Supply”) in each phase being set out in Annex 1 to the Contract. These four phases were:
Phase 1: Concept Design;
Phase 2: Tender Package;
Phase 3: Basic Design; and
Phase 4: Delivery Documentation.
The Contract was subsequently varied so that some of the Phase 3 work was placed into a new phase (between Phases 2 and 3) described as “Early Engineering”.
Clause 1.3 stipulated that Salt's design work would be delivered to Prysmian on a specified Delivery Date for each phase. As is obvious from the descriptions of the phases (and as is implicit in clause 2.3, the terms of which are set out below), it was contemplated that, at the end of Phase 2, a tender document would be prepared for the physical construction of the vessel by a shipyard.
Clause 2.1 of the Contract provided for Salt to be paid compensation for the overall Scope of Supply of EUR 1,910,000, with specified sums within that overall amount being paid for each phase. Approximately 10 percent of the overall amount was payable for Phases 1 and 2 and the remaining 90 percent for Phases 3 and 4.
Clauses 2.2, 2.3 and 2.4 of the Contract are of some importance and I therefore set them out in full:
“2.2 It is understood and agreed that if the Project materializes and a shipbuilding contract is concluded with a shipyard (the ‘Yard’), a Design Contract shall be entered into between the Designer and the Yard and all the above compensation shall be paid by the Yard.
2.3 In case the project does not materialize and a shipbuilding contact is not concluded within 31 st of January 2018, the Designer shall be compensated by the Client for the Phase(s) of Supply completed in the amounts indicated above. In case the Client to request the Designer to complete the Scope of Supply for Phase 3 and 4, a separate payment schedule shall be agreed.
2.4 In case the Client has to compensate the Designer for the works performed by the Designer and accepted by the Client, the Designer shall issue an invoice for the related value to the Client, strictly following Client's invoicing instruction. Client shall settle all approved invoices, correctly issued by the Designer, within 30 days from the date in which the invoice has been issued by the Designer.”
It is common ground between the parties that Salt has performed, and has been paid by Prysmian for, its Phase 1, Phase 2 and Early Engineering work. Final revisions of all documents in respect of Phases 1 and 2 were issued by 10 November 2017 and an Acceptance Protocol was signed by both parties on 22 November 2017.
In late September 2017 a request for a quotation for the construction of the proposed vessel was sent to a number of shipyards. Ultimately, three shipyards were short-listed by Prysmian: Vard Group AS (“Vard”), a Norwegian subsidiary of the Fincantieri group, Damen Group and PaxOcean Group. It is common ground, however, that no shipbuilding contract was concluded by 31 January 2018.
There were ongoing discussions between the parties both before and after 31 January 2018, in particular on 14 February 2018 when there was an exchange of emails which Salt alleges, but Prysmian denies, gave rise to an amendment to the Contract or to a new contract. It is accepted, however, that Prysmian never requested Salt to complete, and that Salt never did complete, any of the Phase 3 or 4 work.
Ultimately, on 8 March 2018, Prysmian sent an email to Salt, with the subject line “SFA PPL-Salt/Termination”, in the following terms:
“As discussed on the phone, we refer to our agreement dated 12–13.7.17 for design of a new cable laying vessel for our Company.
As you know we have not concluded any shipbuilding contract so far inspite of having launched a tendering process to some yards since September last.
Recently a yard in an effort of getting a lower price which could incentivize us to negotiate suggested a considerable reduction of the purchase price if, among others, they make the design in house.
We are presently considering this proposal and have asked the yard to produce its own design and an offer to accommodate our overall objective.
In the meantime we wish to thank you for the work done so far kindly ask you to stop progressing any work on our project.
We shall pay you for the work done so far and in this connection we ask you to let us have computation of work done in connection with Phase 3 of the project for our consideration so that we may be mutually released from any obligation under the above agreement.
Needless to say that shouldn't we enter into a contract with the yard above we reserve to come back to you and reconsider any further cooperation.”
The “yard” referred to in Prysmian's 8 March 2018 email as having offered Prysmian a reduction in the price if it could carry out the design work in-house was Vard. Vard had originally tendered for the design of the vessel in early 2017 but had lost out to Salt. Although not, therefore, engaged as the designer of the vessel, it was one of the three short-listed yards for the construction.
In fact, as emerged in Prysmian's initial disclosure in these proceedings, on 5 March 2018, i.e., three days before this email was sent, Prysmian and Vard had agreed a Letter of Intent (“LOI”) which recorded that they were in negotiations to conclude “the Contract” for a cable laying vessel.
The copy of the Letter of Intent...
To continue reading
Request your trial
-
Dr Riccardo Frati v Karen Bowen-Carter
...in respect of summary judgment. 44 The application needs to be considered by reference to the overriding objective: Salt Ship Design AS v Prysmian Powerlink SRL [2019] EWHC 2308 (Comm), [65]–[68], and will include consideration of the list of factors identified by Lambert J in Pearce v Eas......
-
Dr Craig Wright v Peter McCormack
...an exercise of the court's discretion, with such discretion to be exercised in accordance with the overriding objective: Salt Ship Design AS v Prysmian Powerlink SRL [2019] EWHC 2308 (Comm), [65]–[68]. He said that given the Defendant: (a) pleaded a defence to Publications 1 to 10; (b) adm......
-
Salt Ship Design as v Prysmian Powerlink SRL
...This followed a heavily contested application for permission to amend which was decided by Mr. David Edwards QC, sitting as deputy: [2019] EWHC 2308 (Comm). In a comprehensive and careful reserved judgment, the deputy judge granted permission to amend notwithstanding that this would result......