Commercial Disputes Weekly – Issue 659 March 2021

Arbitration
In an interesting case concerning the enforceability of a damages-based agreement, the Commercial Court has emphasised the high threshold required to successfully challenge an award on the grounds of serious irregularity, holding that the claimants had a fair opportunity to challenge all the essential building blocks of the arbitrator’s decision and so there was no basis for the court to intervene in their decision.
Cakebread & Anr v Fitzwilliam

Jurisdiction
The Court of Appeal has made clear that in the case of an application to serve proceedings out of the jurisdiction in the case of an alleged evolving international fraud, the absence of immediate reliance could not be said to render a particular misrepresentation insubstantial or not causative of eventual loss.  The test to serve out could be met if the misrepresentation substantially contributed to the ultimate deception.
Manek & Ors v IIFL Wealth (UK) Limited & Ors

Limitation
In a useful decision concerning the effect of an error as to court fees, the Court of Appeal has stated that non-payment of a fee will not, of itself, prevent a new claim made in existing proceedings from being “made” for the purposes of the Limitation Act 1980.
Butters & Anr v Hayes

Open justice
Emphasising the importance of the open justice principle in English litigation, the High Court has granted a business intelligence and media organisation access to copies of witness statements filed in relation to proceedings concerning approval of a scheme of arrangement. Allowing access to the statements would allow public scrutiny, as well as making the case comprehensible to the public, and there was no suggestion that the information in the statements was confidential or that disclosure would be harmful.
Re Port Finance Investment Limited

Penalty clauses (1)
In a case concerning the termination of an aircraft purchase agreement, the Commercial Court has commented that even if a liquidated damages clause cannot be relied upon on the basis that it is an unenforceable penalty, that will not deprive it of the right to a remedy in damages under the common law, agreeing a pre-estimate of damages which is subsequently found to be a penalty is not an irrevocable election between remedies. In any event, the liquidated damages clause in this case was not an irrecoverable penalty.
De Havilland Aircraft of Canada Limited v Spicejet Limited

Penalty clauses (2)
Noting that it is not only the contractual right which is breached which should be considered when determining the proportionality of an alleged penalty clause, the High Court has rejected arguments that provisions in a settlement agreement by which sums paid in respect of IP rights would be repayable if the defendant claimed an entitlement to those rights constituted an unenforceable penalty.
Permavent Limited & Anr v Makin

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: