Triple Point Technology, Inc. v PTT Public Company Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Jefford |
| Judgment Date | 17 January 2018 |
| Neutral Citation | [2018] EWHC 45 (TCC) |
| Date | 17 January 2018 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2015-000056 |
[2018] EWHC 45 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Jefford
Case No: HT-2015-000056
Mr Andrew Stafford QC (instructed by Kobre & Kim (UK) LLP) for the Claimant
Mr James Howells QC (instructed by Watson Farley & Williams LLP) for the Defendant
This judgment arises out of a trial in which I handed down judgment on 23 August 2017. As set out in that judgment, the litigation arose out of the performance and termination of a contract between the parties for a Commodity Trading and Risk Management system. In summary, the claimant, TPT, was unsuccessful in its claims. The defendant, PTT, successfully defended the claims against it and succeeded in its counterclaim in a total sum of over US$ 4 million. By consent all consequential matters were reserved and a hearing to deal with those outstanding matters was held on 4 October 2017.
By the time of that hearing, apart from the Claimant, TPT's, application for permission to appeal which I dealt with orally, there were 4 contentious matters, which I take in the order in which they were addressed by PTT:
(i) the rates of interest to be applied to PTT's damages
(ii) the period of interest in respect of PTT's damages
(iii) the amount of any interim payment on account of costs
(iv) the rates of interest to be applied to PTT's costs
I had before me on the application 3 statements of Mr Robert Fidoe of Watson Farley & Williams LLP, PTT's solicitors and 2 statements of Alexander Shirtcliff of Kobre & Kim (UK) LLP, TPT's solicitors.
The background to these issues is the Part 36 offer made by PTT dated 31 May 2016. In that letter PTT offered to accept the sum of US$2,091,075.76 in settlement of both claim and counterclaim. That offer expired on 21 June 2016. Obviously, therefore, PTT has done better than that offer and there is no dispute that the provisions of CPR Part 36.17(4) are engaged.
That Part provides as follows:
“(1) Subject to rule 36.21, this rule applies where upon judgment being entered—
(a) a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer; or
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer.
(2) For the purposes of paragraph (1), in relation to any money claim or money element of a claim, “more advantageous” means better in money terms by any amount, however small, and “at least as advantageous” shall be construed accordingly.
…
(4) Subject to paragraph (7), where paragraph (1)(b) applies, the court must, unless it considers it unjust to do so, order that the claimant is entitled to—
(a) interest on the whole or part of any sum of money (excluding interest) awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;
(b) costs (including any recoverable pre-action costs) on the indemnity basis from the date on which the relevant period expired;
(c) interest on those costs at a rate not exceeding 10% above base rate; and
(d) provided that the case has been decided and there has not been a previous order under this sub-paragraph, an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is—
(i) the sum awarded to the claimant by the court; …..
(5) In considering whether it would be unjust to make the orders referred to in paragraphs (3) and (4), the court must take into account all the circumstances of the case including—
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made;
(d) the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and
(e) whether the offer was a genuine attempt to settle the proceedings.
(6) Where the court awards interest under this rule and also awards interest on the same sum and for the same period under any other power, the total rate of interest must not exceed 10% above base rate.”
The rate of interest
It is common ground that PTT is entitled to interest on damages from the date of termination of the CTRM Contract, 23 March 2015, to 21 June 2016 and to interest at an enhanced rate thereafter. The period over which that enhanced rate should apply is, however, in issue.
So far as the rate of interest to 21 June 2016 is concerned, it is PTT's case that it should have interest at a rate of 6.5% which, as set out in Mr Fidoe's statement, is a rate that has been derived from lending rates in Thailand.
PTT's argument is that PTT is a Thai company; the contract was made and performed in Thailand; and its losses were felt in Thailand. Further Mr Fidoe's evidence is both that that rate compares favourably with the statutory rate of interest in the Thai courts pursuant to the Civil and Commercial Code of the Kingdom of Thailand and that it is below PTT's own cost of capital and financing which is calculated based on a Weighted Average Cost of Capital.
TPT argue that the rate should be US Prime Rate which, accordingly to the Appendix to Mr Shirtcliff's statement, has varied over the relevant period between 3.25% and 3.50%.
I trust that I do no injustice to TPT's argument by putting it simply as that the currency of the contract and the judgment is US dollars and that it is, therefore, appropriate for the rate of interest to be US prime rate. In my judgment that submission is well made.
Although the contract was concluded in Thailand and largely performed in Thailand for a Thai company, the parties in at least two important respects divorced this contract from Thailand: firstly, they chose to make the contract subject to the law of England and chose the jurisdiction of the courts of England and Wales; secondly, they chose the currency of the contract as US dollars. Given the choice of law and jurisdiction, a comparison with the rate that would have been applied in the Thai courts seems to me irrelevant. Given the choice of currency, and as I consider further below, the company's general costs of financing are also of little, if any, relevance and there was no evidence of the cost of borrowing US dollars.
On this issue, Mr Stafford QC, on behalf of TPT, referred me to McGregor on Damages, 19 th ed., para. 18–120 for a summary of the position. I quote from this paragraph:
“Commercial cases have appeared in which the interest rate has had to be arrived at with reference not to sterling but to foreign rates; the courts have been prepared to be guided by the rate at which a person could “reasonably have borrowed” the foreign currency in the foreign country. Thus United States prime rate was awarded in Kuwait Airways v Kuwait Insurance and the same rate was given, following the Kuwait case, in Kinetics technology International v Cross Seas federal Shipping Corp, The Mosconici …. A like result was arrived at in Mamidoil-Jetoil Greek Petroleum Company SA v Okta Crude Oil Refinery AD . Aikens J there said:
“When the currency of the loss and the currency of damages is US dollars, then the Commercial Court will consider the cost of borrowing US dollars. That is the position in this case. The cost of borrowing US dollars is usually expressed by reference to the US Prime Rate. That is the rate that commercial banks charge their most creditworthy customers if they are borrowing US dollars.”
By contrast, in Fiona Trust & Holding Corp v Privalov , where the award to the claimants, who were very many Russian ship-owning groups, was to be in US dollars, Andrew Smith J., while stating that it had become conventional in commercial cases to award US Prime Rate, considered it more appropriate in the case before him to award US LIBOR plus 2.5 per cent rather than US Prime Rate. This was because those operating outside the United States were unaccustomed to Prime Rate, and more importantly, because borrowings by shipping companies were generally effected using LIBOR.”
This summary, and the authorities it refers to, indicate that it is common to award interest at US Prime Rate as the cost of borrowing US dollars, where the currency of loss and damage is US dollars. But that is not necessarily the case, particularly where there is evidence of a more appropriate rate of borrowing that currency.
In this case, the currency of the contract was US dollars; the contractual cap on liability was, by definition, in US dollars; and liquidated damages for delay were expressed in US dollars. PTT's counterclaim was in US dollars. As I said in my judgment, the evidence in support of that counterclaim was broad brush, although not challenged, but there was therefore no evidence as to the currency in which that loss was felt or how it was funded.
In my view, in these circumstances, I should adopt the common approach and interest should be payable up to 21 June 2016 at US prime rate.
So far as the enhanced rate of interest is concerned, PTT argue that it should be at 4% over the basic rate of 6.5%, subject to the cap in rule 36.17(4)(a). TPT argue for a figure of 5.5% which appears to be based on an uplift of 4% over what would have been payable if interest had been payable at a percentage over base rate.
The effect of PTT's case is that I am invited to award the maximum rate allowed under the CPR. Mr Stafford QC says that that is wrong because the maximum is not the starting point and should only...
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