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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Adam Opel GmbH & Anor v Mitras Automotive (UK) Ltd [2007] EWHC 3205 (QB) (18 December 2007) URL: https://www.bailii.org/ew/cases/EWHC/QB/2007/3205.html Cite as: [2007] EWHC 3205 (QB), [2008] Bus LR D55 |
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QUEEN'S BENCH DIVISION
B e f o r e :
sitting as a Deputy High Court Judge
____________________
(1) ADAM OPEL GmbH (2) RENAULT S.A. |
Claimants |
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- and- |
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MITRAS AUTOMOTIVE (UK) LIMITED |
Defendant |
____________________
PO Box 1336, Kingston-Upon-Thames, Surrey KT1 1QT
Tel No: 020 8974 7300 Fax No: 020 8974 7301
Email Address: mlstape@merrillcorp.com
____________________
Crown Copyright ©
Introduction
The contractual background
"The following projections cannot be considered as an undertaking on the part of the car makers".
The general conditions of the RFQ provided under the heading "Orders":
"Opel and Renault reserve the right to nominate third-party vehicle manufacturers to place orders with the supplier for purchasing prototypes, piece parts, specific tooling, and special containers. Where the third-party vehicle manufacturer is so nominated and places an order with the supplier, it shall be wholly responsible to the supplier in connection with that order.
Note: it is intended that IBC Vehicles Limited will order all series piece parts."
"The Purchase Order issued by the Buyer shall be deemed to incorporate the Request for Quotation (RFQ) issued by Adam Opel AG and/or Renault in respect of or relating to the goods, all documents referred to therein and all subsequent correspondence between the Supplier, the Buyer and/or Adam Opel AG and/or Renault and together with these terms and conditions shall constitute the complete agreement between Supplier and Buyer."
Clause 20 provided that:
"The Buyer may at any time give written notice to the Supplier to terminate the Purchase Order forthwith and in such event the Buyer shall unless otherwise agreed, pay, and the Supplier shall accept, in settlement of all claims under the Purchase Order such sum as shall compensate the Supplier for all work reasonably done and obligations reasonably assumed by it in performance of the Purchase Order prior to its termination and for all work reasonably done by it in giving effect to such termination ..."
"1.1 The Equipment is the exclusive property of Renault and Opel and it is lent, without charge, to the User to enable the User to manufacture/deliver parts for incorporation into vehicles which are to be produced for sale by Renault, Opel or their respective affiliates. Unless Renault and Opel agree in writing to something else, the User shall not use the Equipment except to fulfill orders placed on the User by any of Renault, Opel and their jointly nominated vehicle manufacturers. ...
1.2 By virtue of these terms, ownership of the Equipment does not pass to the User and nor shall the User have any rights to or interest in the Equipment. The User undertakes to return the equipment to Renault and Opel upon their request or demand and acknowledges that Renault and Opel have the right to take possession of all or part of the Equipment for any reason whatsoever at any time ... ...
2.2 Upon the request of Renault and/or Opel the User shall immediately cease to use the relevant item of Equipment and make arrangements for its safe storage and subsequent delivery to such place and at such time as Renault and/or Opel shall reasonably direct ..."
(a) It was or became common ground that Mitras was under a contractual obligation to GMR to deliver units in response to the weekly schedules and daily call-offs (exactly which does not matter to the resolution of the issues in this case).
(b) Though Clause 20 in terms refers to a Purchase Order placed by IBC, the parties agreed that it should be treated as applicable mutatis mutandis to a termination by GMR of the sole supply arrangements with Mitras.
Events leading up to the end of the sole supply arrangements in 2006
" due to an engineering change, which we are obliged to carry out, MITRAS capabilities of compression molding would no longer apply for our facelift in phase II starting this year after the summer shut down."
That gave Mitras notice that it would cease to be the supplier of the unit after the first week of August 2006, and the weekly schedules would already have reflected this. The new nominated suppliers were at first intended to be Collins & Aikman, but they went into administration at an early stage before tooling and development had been greatly progressed, and their role was transferred to Plastic Omnium, based in Telford.
" 1. Outstanding amortisation to be paid 195,146.40 GBP (487,866 units @ 0.4 GBP/unit).
2. The 3% year-on-year cost reduction will be re-credited giving a total outstanding of 177,410.41 GBP.
3. The 0.5 GBP given as a reduction at the commencement of the project total of 187,695.50 GBP to be recredited.
4. A new selling price of 14.15 GBP with effect from 1st February, 2006 until the run-out of production in July, 2006."
Mr Worrall was thus seeking payment of some £560,000 together with a price increase of over £2.00 back-dated to 1st February 2006, potentially more than £100,000. He concluded the letter by saying:
"In closing, we seek your urgent agreement to the above or we reserve the right to suspend supplies until an acceptable resolution is put in place.
I am happy to meet with you ... but stress that an urgent resolution is required – this should take a maximum of two to three weeks to achieve."
"You are free to make whatever interpretation you wish however, the reality is that we are not compelled - nor are we willing - to supply at less than the quoted price.
You have a choice of either accepting the price or procuring the goods elsewhere."
"Therefore, in the proposed conference call at 2 p.m. GMT on Monday 13 March, 2006, GM/Renault must advise whether they wish to accept or decline the offer.
In the event that GM/Renault decline the offer, they must make arrangements to collect the tooling and equipment and organise an alternative supply for this product.
The tooling/equipment will only be released when all outstanding amounts owed to meet first by GM Renault are cleared in full."
"We refer to previous correspondence and discussions between us, culminating in your requirement for a yes or no answer in writing by noon today.
As you know we continue strongly to refute your analysis of the contractual position. We also feel very strongly that we do not have any liability to pay Mitras the capital sums and enhanced piece prices. On the other hand, as you probably know, our stock of these parts is down to one days supply. As we mentioned in our fax yesterday, you have placed us in an impossible position. We have therefore decided to deal favourably with your demands.
We therefore confirm that we will make the payment sought in your second fax of 9th March, on the dates you specify on account of such liability as we have. This is strictly conditional upon continued supply."
Duress
The relevant law
"The ingredients of actionable duress are that there must be pressure, (a) whose practical effect is that there is compulsion on, or a lack of practical choice for, the victim, (b) which is illegitimate, and (c) which is a significant cause inducing the claimant to enter into the contract: see Universal Tanking of Monrovia v. ITWF [1983] AC 336, 400 B–E, and The Evia Luck [1992] 2AC 152, 165 G. In determining whether there has been illegitimate pressure, the court takes into account a range of factors. These include whether there has been an actual or threatened breach of contract; whether the person allegedly exerting the pressure has acted in good or bad faith; whether the victim had any realistic practical alternative but to submit to the pressure; whether the victim protested at the time; and whether he confirmed and sought to rely on the contract. These are all relevant factors. Illegitimate pressure must be distinguished from the rough and tumble of the pressures of normal commercial bargaining."
Relevant facts and evaluation
(1) The window for Salvesen, IBC's haulier, to make the daily collection from Mitras was 8.00 a.m. to 4 p.m. but in practice had been made at about 2 p.m. This was advanced to 8.00 a.m., giving extra time for reaction if something went wrong and advancing deliveries by half a day, and collections had been made on this basis for about 2 weeks before the refusal on the morning of 14 March 2006.
(2) Mr Thrussell, a Senior Expeditor or "Followman" at IBC charged with day-to-day liaison with Mitras, arranged for one load to be transported directly from Mitras to Luton and stored in the car park. This he regarded, in the spirit of a quartermaster sergeant, as his secret cache for use in emergency, and its existence was not leaked beyond his colleagues in the logistics department. In the event that supplies were halted, the units in the car park would have doubled the survival time from about 24 to 48 hours. But since, as I was satisfied, Mr Thrussell's manoeuvre was not reported to GMR, they were working on the basis of a 24 hour reserve.
Absence of consideration
"This concession is also given on the understanding that Mitras will not seek any further price increases or capital sums."
I do not read this as focussing on the question of compensation under Clause 20 but rather as a requirement that no further similar "blackmail" demands were to be made by Mitras.
Counterclaim
"for all work reasonably done and obligations reasonably assumed by it in performance of the [sole supply arrangement] prior to its termination and for all work reasonably done by it in giving effect to such termination".
On the basis that it is held liable to repay the monies obtained pursuant to the agreement of 15 March 2006, Mitras counterclaims in respect of three items said to be recoverable as compensation under Clause 20.
(a) Amortization of specific development costs
(b) Amortization of capacity investment
(c) Removal costs
Relief