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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Globe Motors, Inc & Ors v TRW Lucas Varity Electric Steering Ltd (Rev 1)  EWHC 3718 (Comm) (11 November 2014)
Cite as:  EWHC 3718 (Comm),  CN 2052
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| (1) GLOBE MOTORS, INC.
(2) GLOBE MOTORS PORTUGAL-MATERIAL ELECTRICO PARA A INDUSTRIA AUTOMVEL LDA
(3) SAFRAN USA INC
|- and -
|(1) TRW LUCAS VARITY ELECTRIC STEERING LIMITED
(2) TRW LIMITED
Mr Paul Downes QC and Ms Emily Saunderson (instructed by Wragge Lawrence Graham & Co LLP & Co) for the Defendants
Hearing dates: ,6,10-13,17-21,24,25 and 31 March,1-3,7-10, 14 and 15 April 2014 and 10 -12,17-19 and 26-27 June 2014
Crown Copyright ©
JUDGE MACKIE QC:
|Simplified outline of the disputes between the parties||8|
|Technical background- EPAS systems and platforms-Preliminary||30|
|Platforms, models and motors||48|
|The background facts- some of those which are undisputed or not much in issue||51|
|The Nissan B/Renault P1 platform||58|
|List of Issues||178|
|Approach to construction||180|
|Issues 1 to 4||188|
|Issues 10 to 9 - factual disputes about the Gen 1 and Gen 2 motors-the broad picture||271|
|The expert witnesses||280|
|Main differences between Gen 2 and Globe Gen 2||289|
|The 'could and would' case- the parties' submissions||327|
|Issues 5 to 17||356|
|Issues 19 to 25||494|
Simplified outline of the disputes between the parties.
This Purchase Agreement (this "Agreement") is entered into as of June 1, 2001 (the "Effective Date") by and between (i) TRW Electric Steering Ltd ("Buyer") and (ii) Globe Motors, Inc. ("Supplier").
A. Buyer wants to purchase from Supplier Brushless electric motor and leadframe assembly, produced in accordance with the Specifications attached as Appendix A ("Products") to be used in conjunction with EPS Systems. This was not attached
B. Supplier wants to sell Products to Buyer.
In consideration of the premises and the mutual promises herein, Buyer and Supplier (the "Parties") hereby agree as follows:
Purchase and Sale
1.1 Products: The Products include, but are not limited to, (i) motor and leadframe assembly for 38Nm Nissan B/Renault P1. (ii) motors and leadframe assembly for 58Nm Fiat C192, and (iii) motors and leadframe assembly for 58Nm Renault P2. The parties may add additional products by mutual agreement. Supplier shall not sell the part numbers referenced in this agreement to a third party,
1.2 Volume: Buyer will purchase from Supplier all of Buyer's requirements of the Products and Supplier will sell to Buyer all such quantities of Products as Buyer order from time to time pursuant to this Agreement. The quantities will depend upon the requirements of Buyer's customers (currently Fiat, Nissan, Renault). At present, Buyer estimates that it will require the following:
|Fiat C 192;
|Nissan B Renault P1 38 Nm||225k||475k||743k||1081k||1081k|
Variance is estimated at +/- 15%
1.3 Delivery: Supplier will deliver Products to Buyer in accordance with a mutually acceptable order entry and delivery schedule process all of which shall also conform to the lead times for each Product as specified herein.
1.4 Invoices: Supplier will submit a separate invoice for each individual delivery.
1.5 Identification: Supplier will include on each invoice, bill of lading, or other document relating to the shipment of a Product the (i) part number and issue level of the Product, (ii) the delivery date of the Product, and (iii) the location to which the Product is to be delivered.
1.6 Payment Terms: For those Products shipped from North America Buyer shall pay 60 days net after such Products are withdrawn from the consignment stock. For those Products shipped from Supplier's plant located in a European facility, Buyer shall pay 90 days net after such Products are withdrawn from the consignment stock.
1.7 Consignment stock: Supplier shall maintain a consignment of inventory of the Product in accordance with a mutually agreed upon Consignment Agreement. Such agreement will take into account that the inventory levels will be ten (10) working days maximum whilst Supplier is shipping Product from North America and such time will reduce to five (5) working days maximum when Supplier is shipping product from Europe. The consignment stock will be located at the relevant TRWassembly plant.
1.8 Manufacturing Location: The supplier has committed to produce the products at a European manufacturing location as soon as practicable - anticipated to be in 2002.
2.1 Initial Price 2001: The Initial Price (as of the Effective Date) for each Product based on the assumptions with details of tooling and amortization as shown in Appendix. D.
2.2 VA/VE: Any cost reductions Supplier achieves during the Term will be shared 50/50 between Buyer and Supplier. Implemetation of such reduction will be agreed to by both parties as to the date of effectivity of the price reduction.
2.3 Productivity Price Adjustment: As agreed to in the pricing schedule as outlined in Appendix D.
2.4 Material Cost Adjustment. Adjustments which will be mutually agreed, will be determined as follows,
a. Each Party will have the right to seek a price adjustment if changes in raw material prices as listed on Appendix C cause the cost to Supplier of selected raw materials to vary by more than +/- 10% from the baseline assumptions stated in Appendix C.
b. Review of raw material prices will be carried out on the 30 June and 31 Dec. of each year, (based upon 6 monthly average compared to the baseline indices).
c. Supplier will not issue to Buyer an invoice for a retrospective price increase unless, following discussion with Buyer, written permission from Buyer has been received in advance.
a. Buyer shall pay in US $ for Product shipped from North America. Buyer shall pay in Euros for Product shipped from Europe. Should the supplier not relocate the production to Europe by 31/12/2002 then the purchaser shall reserve the right to pay in Euros thereafter, as if the supplier had changed location.
b. Exchange Rate: For purposes of establishing the appropriate sales price of each Product upon the shift of production from the US to Europe, an exchange rate between US $ and Euros shall be established and shall be based on the mathematical average of the exchange rates between US$ and Euros as listed in the Wall Street Journal for the calendar month immediately preceding the month in which such production is begun in Supplier's European facility.
2.6 Underrecovery of supplied products: The parties acknowledge and agree that Supplier shall recover its costs of tooling and capital by amortizing such costs over the units to be sold over the first five (5) years of this Agreement (''Recovery Period"). During the Recovery Period, the volume of Buyer's purchases of each Product shall be reviewed the first month of each year following the initial year of the agreement. In the event that the aggregate volume of Buyer's purchases of each Product during the preceding years is less than that which is provided in Article 1.2 above and such variance is greater than fifteen percent (15%), then Supplier shall adjust its pricing so as to amortize the remainder of Supplier's tooling and capital costs over the forecasted units to be produced for the remainder of the Recovery Period. If, at the end of the Recovery Period, Supplier shall not have fully recovered its tooling and capital costs, then Supplier shall invoice Buyer for the remaining portion of such costs and Supplier shall pay on such invoice within ninety (90) days following its receipt of such invoice.
Warranty and Quality
3.1 Product Warranty: The warranty under which the Product will be sold to Buyer shall be that which is detailed on Appendix B.
3.2 Traceability: Supplier will provide for Product traceability.
3.3 Re-call campaigns: Will be negotiated and treated separately to this agreement.
3.4 Trend Information: To be agreed
4.1 General: Buyer reserves the right to propose, at any time, changes in the Specifications or other requirements relating to the Products (''Engineering Changes").Supplier has to mutually agree. Buyer will advise Supplier of all Engineering Changes by giving Supplier prior written notice. If Supplier proposes to make an Engineering Change, Supplier will advise Buyer of such proposal. Before making such proposed Engineering Change,
Supplier must obtain prior written approval from Buyer.
4.2 Effects of Change: Following notice of an Engineering Change by Buyer or of a proposed Engineering Change by Supplier, Supplier will use all reasonable efforts in cooperation with Buyer to minimize the effects of such Change and will submit to Buyer as soon as reasonably practicable a written statement of the anticipated effects of such Change on production costs, delivery schedules, and matters related thereto.
4.3 Cost: Buyer will reimburse Supplier for all reasonable costs associated with each Engineering Change made by Buyer within ninety (90) days following its receipt of Supplier's invoice for such costs, which such invoice will not be issued prior to the implementation of such Change. Such costs will include reasonable costs related to surplus inventory and obsolete Products, tooling, and equipment. Buyer and Supplier will negotiate, in good faith, the allocation of costs associated with each Engineering Change proposed by Supplier.
5.1 Term: The Term of this Agreement will begin on the Effective Date and shall continue for the lifetime of each of the platforms at a rate of 100% of the platform requirement as estimated in Article 1.2.
5.2 Termination: Either Party has the right to terminate this Agreement forthwith by written notice to the other Party if the other Party (a) becomes insolvent or enters into any composition or arrangement (whether formal or informal) with its creditors;(b) is unable to pay its debts; (c) has a receiver, manager, administrator or administrative receiver appointed of its assets or income or any part thereof; (d) has passed a resolution for its winding up; (e) has a petition presented to any court for its winding up, which is not discharged within fourteen days after first hearing; (f) has done or suffered any equivalent act in accordance with the laws of its country of incorporation or (g) has committed a material breach of this Agreement and such breach is not cured within nine (9) months following the party-in-breach's receipt of written notice from the other party advising of such breach.
5.3 Rights of each Party: The termination of this Agreement will not affect the rights and duties of either Party which accrued prior to such termination.Article 6
6.1 Intellectual Property: Each party will continue to own all rights in its respective intellectual property and further, the parties acknowledge and agree that no licenses to such intellectual property are granted, expressly or impliedly, by either party to the other by virtue of this Agreement.
6.2 Service Parts: Supplier will continue to supply Products to satisfy customer service needs ("Service Products") for ten (10) years following the date on which the relevant platform ceases Serial Production. During such ten-year period, Supplier will maintain, in good condition, the tools, machinery, and equipment necessary to produce Service Products. The price for Service Products will be negotiated on a case-by-case basis.
6.3 Entire Agreement; Amendment: This Agreement, which includes the Appendices hereto, is the only agreement between the Parties relating to the subject matter hereof. It can only be amended by a written document which (i) specifically refers to the provision of this Agreement to be amended and (ii) is signed by both Parties.
6.4 Ownership. If ownership of either Party changes, the provisions of this Agreement will remain in full force and effect until the end of each platform life.
6.5 Resolution of Disputes: The Parties will take reasonable steps to settle amicably and in good faith any disputes which may arise hereunder. The English language version of this Agreement shall be the authoritative version even though it may be translated into some other language. All aspects of the Agreement (including its formation) shall be governed by English Law. Both parties hereby agree to submit to the exclusive jurisdiction of the English Courts.
Technical background- EPAS systems and platforms-Preliminary
-the mechanical parameters to which the motors were to be built. The most important of these were Output Torque (the power of the motor, measured in Newton Metres (Nm), Cogging Torque (the smoothness of the rotor to rotate ), Ripple Torque(Periodic increases and decreases in output torque ) and Friction Torque (which affects the ability of the vehicle to self-centre
-the physical dimensions of the motors – e.g. the diameter and maximum length of the space into which the motor should fit; -matters such as permissible noise
-the interface of the motors with the EPAS system.
-the design (i.e. the way in which the motors are manufactured in order to meet the above specifications) was left to Globe. Globe says ( but TRW disputes) that so long as Globe built motors that achieved the performance or "functional" specifications for each model as finally negotiated and agreed by TRW it was not obliged to build them in any particular way.
"From Globe's perspective, what is of importance is the motor torque required by the customer. The system torque has no relevance to Globe. Often Globe is never told the minimum or maximum system torque values, because that is an issue for the manufacturer of the EPAS system (in this case, TRW). There are many variables that affect the system torque of an EPAS system which are unrelated to the motor torque. These include, but are not limited to, the efficiency of the system's ECU, the system's gearing ratio and the voltage or the maximum current applied to the motors. None of these parameters are determined by Globe."
Platforms, models and motors
The background facts- some of those which are undisputed or not much in issue
"Globe at that time was (and maybe still is) the only supplier in the world which can build up a motor the way we wanted because of their worldwide patent of a special winding technology. Main advantage of Globe's technology low noise and smooth run of the motor for the given seize [sic]".
The Nissan B/Renault P1 platform
"… have received a contract for the P1 platforms from Renault. The term contract means that they have the same agreement that they currently have on the P2 (Megane). They have been selected as the approved technology source etc … According to both Mike and Brendan the P1 platforms are the Renault Clio and Nissan Micra. Maybe J L Lamy can glean some additional information out of his contacts at Renault."
"I think that the strategy for the Clio is to split the volume between Globe and Emerson because:
a) We do not have a system with an Emerson motor yet. The prototypes are being shipped with Globe motors.
b) Globe are more advanced and seem to be the only supplier that can meet our timescale for job 1.
c) The Emerson technology offers a potential for a higher torque output within the same package – our customer wants this post-job 1."
"Nissan Micra, Renault P1 (Clio) replacement vehicle, 1000K p.a.
Selected source – to be confirmed, likely split with Low power motor (38Nm) at Globe and High power motor (42Nm-45Nm) at Emerson …"
-Gen 2 was planned for 2005 (according to the TRW roadmap).
-Gen 2 offered the only real alternative to meet the programme price/cost targets.
-The P1 platform represented a realistic prospect for the development of the opportunity.
-For SOP (short for "Start of Production") Q4/2003, they would need to have completed concept evaluation by or in November 2001.
-With support from Renault/Nissan and commitment from TRW, there was an opportunity to launch the project in Nov/Dec 2000.
-TRW senior management and customer approval was required.
"subject to the terms and conditions set out in the Preferred Supplier Agreement which we expect you to agree and sign forthwith".
|MM (ie Micra/March) Japan||14/01/02|
|C89 – New Car||01/05/03|
|J77 – Twingo||01/12/03|
|B85 – Clio||01/12/04|
"TRW claims that they will be using the same magnets for the two Nissan motors: 38Nm and 45Nm. The two motors will have the same length (42mm), but they will find a way to put more copper in the 45Nm motor.
The second supplier is still not nominated, that will be done by November."
"? VAVE is driven by Hoshino-san for Nissan …
? wants to concentrate on Gen II 100% and to understand if it can fit into P1 Prg for Renault Target is 2004"
"Gents. Best information I have. We need to see more specifications from Renault. PB"
"… I just wanted to take a moment and clarify a couple of things if I could. I certainly appreciate where the Emerson personnel would make it easy to claim that the value of Globe Motors dropped relative to the subsequent meeting with John Plant. I appreciate that Mr Gallion would want you to believe this. I personally believe that this was not what caused our friends in St Louis to back away from the pursuit of Globe Motors. It is my belief that the two factors affecting or leading to this decision were the commitments made by TRW to both (Globe Motors and our competitor) as well as their concerns relative to the margins involved in the automotive marketplace.
… The other important point I would like to make is that I know you personally had nothing whatsoever to do with the other commitment or letter of intent issued to our competitor…"
"TRW for B platform (W85) is developing a new motor with Emerson".
"Assuming TRW ceased to purchase motors from Globe at the end of 2003 due to customer or product reasons which were not caused by Globe, then they would presumably believe TRW was in breach of the contract."
The note set out estimates of unrecovered set-up costs for the plant in Portugal and closure costs, the total was €4,935,000. It also said:
"TRW has per the above agreement undertaken to source all its motor requirements for the three existing customers from Globe" and sets out potential claims by Globe that could be envisaged "Should TRW prematurely cease to purchase motors for the three initial customers from Globe"
"Gen2 Gear Ratio and Pole Number are the primary reason for the motor size and cost reduction – Emerson NT Technology is not the enabling factor."
"… Due to cost reasons we need to have a Gen 2 system which has to be cheaper with same or even better performance.
As discussed at our meeting you find attached the Specs for the new Gen 2 motor and we ask you to quote until end next week (19. April). Sorry for the delay, the specs are just finished.
The specs are developed around a 12 slot 10 pole motor but we think that you have several options to quote acc. our requirement:
12/10 motor with Globe winding technology
9/6 motor with Globe winding technology or existing modified motor (may have some Spec constraints)
12/10 motor with conventional wound Stators (bought in; if you have a problem to find a stator supplier please inform us, we can help you.
These 3 options may have different impact on achieving Spec. requirements and costs, therefor we ask you to quote all variance which make sense and please express Specifications deviations and assumptions.
Expected prices are: 32-33 Eur for 47Nm @ 1m/a, ddp, inc. amort. On invest & Tooling, 3% productivity for 4 yrs, inc. packaging, 90d net 25 Eur for 38Nm @ 1m to same conditions."
"Due to Globe's production experience, we know that the inductance balance and resistance balance specifications cannot be met. Globe can provide production achievable ranges if this proposal is accepted. Due to the significant differences between this proposal and the specified motor, a detailed spec review cannot be provided at thus time …"
"You are giving me a hard time because I have committed my management to have the updated quotation by 3rd July. I think I have been very fair to Globe and I thought that it is also in Globe s [sic] interest to take the given chance. You have now postponed several times, don t [sic] claim missing the "point of no return".I will stop reminding you. It s [sic] your call now. Additionally you should think about responding at least to Hans Heckmanns letter regarding Quality Issues (not mentioning several other outstanding Globe answers). Its [sic] your decision."
Mr Keegan emailed a basic Gen 2 quote on 9th July 2002.There was limited explanation or commentary with the quote, except for a note that pricing was in euros and materials in dollars, and that it would be followed up with a BOM in the morning when they discussed the Holford and Pamplona visit. Globe took exception to the resistance and inductance tolerance imbalance targets. The next day a full breakdown of BOM costs and technical exceptions was provided. Mr Heckmann confirmed in evidence that there was nothing unusual in the scope of the technical exceptions given by Globe on Gen 2.
-Existing Gen 1 product in the B and C platform.
-Gen 1 product plus all possible VAVE ideas from Gen 2 (eg Gen 2 sensor).
-Gen 2 product with Gen 1 motor and Gen 1 ECU.
"Agreed, I just wanted to know if I had alternate staffing options. It appears to be feast or famine. TRW is now rumbling about getting Gen II samples, they seem to be getting serious, if that hits, we will be swamped during the Porto crunch time [Redacted Confidential]. I am on a workload whipsaw, I seem to be either worrying about no work or too much."
"The primary objective of this new gen2 is to develop a low cost EPS according to our specification. You committed to co-operate with "open books" on costs, in order to allow Renault to help you improve your current price.
This product is a new product for you, especially on electronics. Our main requirement is to validate there is no risk for Renault. Taking into account Nissan bad experience with Meregreen, production by Motorola is the basic assumption. This co-operation will last until next December, when we are expecting from you a detailed file in the technical and economical feasibility and your quality commitments …Your choice as an expert supplier does not pre judge of your choice as a production supplier."
"Action Gen 2: Inform and discuss with GLOBE about TRW Gen2 technical and commercial needs. (Political reason only!)
Work with legal on GLOBE exit plan – minimize liability!
Legal to clarify whether a change to a 47Nm new motor design results in a breach of the contract."
"TRW is not interested in pursuing Globe Motors as a potential supplier….Obviously, if TRW were to get serious we could certainly adjust the situation to support TRW's efforts. Just wanted to advise you as we continue to hear nothing regarding this matter."
TRW did not provide Globe with more information.
"The 'award' to Globe for this 1.5 year contract does help reduce the liability to Globe based on our inability to buy the volume which was the basis for the investment and tooling amortization. In case we have the opportunity to extend the lifetime of GEN 1 longer than 2005/2006 our liability to Globe and other Supplier will be significant reduced AND we would be in a position to REESTABLISH a relationship with Globe based on partnership and not based on war as it is actually!!!"
"Nissan has resourced the YY volumes away from TRW to Koyo. Effective April 2003. Volume loss is about 400K over YY platform life which ceases in 2006."
"As you are aware, this product was not included in the original agreement for the supply of EPAS products. Addition of product or products to the agreement is by means of mutual agreement.
Globe Motors, at this time, has not agreed to the addition of this product to the original agreement between the two companies."
List of Issues
(A) Construction Issues:
1. "Is there any material difference between the parties as to the meaning of the term 'Engineering Changes' and, if so, what?
2. In respect of motors and leadframe assemblies for the Renault P1 Platform, does the term "Product" include motors and leadframe assemblies built to different specifications from the Globe Gen 1 specifications, where the Defendants required those motors and leadframe assemblies for the platforms identified in the Agreement; those motors were comprised of motors and leadframe assemblies initially produced by the Claimants but with changes to their specifications or other requirements; and where the Claimants could and would have produced those motors and leadframe assemblies by making Engineering Changes to the motors and leadframe assemblies that it initially supplied to the Defendants under the Agreement, under Article 4.1?
3. Are "Products" for the Renault P1 Platform limited to a 38Nm EPAS system, as contended by the Defendants?
4. Are the Claimants obliged to implement Engineering Changes proposed by the Defendants under Article 4.1?
(B) The factual disputes relating to GEN 1 and GEN 2 motors
5. What were the relevant specifications of the DEAS Gen 2 that the Defendant supplied to its customers for the Platforms?
6. What were the material differences between the specifications of the Globe Gen 1 and the relevant specifications of the DEAS Gen 2?
7. Do the changes the Claimants allege they could and would have made to the Gen 1 and/or J77 motor and leadframe assemblies to manufacture their own Gen 2 motor and leadframe assemblies (Globe Gen 2) constitute "Engineering Changes" under Article 4.1 of the Agreement?
8. Could and would the Claimants have implemented those changes to the Gen 1 and/or J77 motor and leadframe assemblies and, if so, within what period of time could they have done so?
9. Would the Globe Gen 2 meet the relevant specifications of the DEAS Gen 2 and/or constitute a direct substitute for that motor?
(C) Breach of contract
10. If, by making only Engineering Changes to an existing Product, the Claimants could and would have made the Globe Gen 2 as direct substitutes for the DEAS Gen 2, then as the Claimants allege(a) under the Agreement was the Defendant obliged to buy all its requirements for Products from the Claimants and hence, should the Defendant have bought all its requirements for Products that were met by the DEAS Gen 2 (or by its own manufacture of an equivalent) from the Claimants?or, as the Defendant alleges(b) was the Defendant free to purchase the DEAS Gen 2 motors and/or manufacture the equivalent thereto itself?
11. Between which dates and for which vehicle model types on the Renault P1 Platform did the Defendant purchase the DEAS Gen 2 and/or manufacture equivalent motors and leadframe assemblies itself?
12. Did the Defendant (or either of them)(a) act in breach of the Agreement by purchasing the DEAS Gen 2;and, if so,(b) which purchases of the DEAS Gen 2 in respect of which motors (to be identified by reference to vehicle model designations using the Renault P1 Platform) constituted such breach or breaches?
13. Is the Second Defendant(a) liable for breaches of the Agreement after 30 December 2006;and, if so(b) are claims against the Second Defendant in respect of breaches between 30 December 2006 and 25 September 2007 statute barred?
14. Are the Claimants estopped from bringing this claim for the reasons alleged by the Defendants in paragraphs 65 to 67 of the Defence?
(E) Loss and damages flowing from breach of contract
15. In the event that the Defendants (or either of them) are found to have acted in breach of the Agreement, are the Claimants entitled, as they allege, to recover damages in respect of:(a) loss of profits in respect of the sales which the Claimants would have made to the Defendant if the Defendant had not acted in breach of the Agreement; and/or(b) restitutionary damages in respect of such sums of money that have accrued to the Defendant and which, but for its alleged breaches, would not have done?
16. If the Claimants (or either of them) are entitled to recover damages in respect of all or some of the above, what is the quantum of each of their loss and damages?
(F) The Second Claimant's right of action
17. Does the Second Claimant have any right of action against the Defendant? In particular:as the Claimants allege, did the parties agree(a) to vary the Agreement to include the Second Claimant as a contracting party; or to novate the Agreement to the Second Claimant; or that the Agreement would be performed by the Second Claimant on behalf of the First Claimant; and(b) to waive any requirement for a formal written amendment to the Agreement recording such changes;or, as the Defendant alleges(c) does the Second Claimant have no right of action against the Defendant because there was no written amendment to the Agreement?
(G) Negligent misstatement
18. Did the First Defendant make the Volume Representations or any of them to the First Claimant (and, if so, which)?
19. Did the First Defendant owe a duty of care to the First Claimant as alleged in paragraphs 35B and 35C of the Particulars of Claim, and if so, what is the scope of that duty?
20. Was the First Claimant induced to and did the First Claimant rely upon the Volume Representations and the Estimates or any of them in entering into the Agreement (and, if so, which)?
21. At the date of the Agreement, were any of the Volume Representations (if made by the First Defendant) inaccurate or false or put forward in circumstances where the First Defendant had no reasonable grounds for believing the same were based on reliable and accurate Estimates?
22. Did the First Defendant act negligently and in breach of duty as alleged in paragraph 35E of the Particulars of Claim?
(H) Loss and damage flowing from negligent misstatement
23. If it is held that the First Defendant acted in breach of duty, did this cause the loss and damage alleged in paragraphs 35H to 35JC of the Particulars of Claim (or any loss) as a result?
24. If it is held that there is a claim for negligent misstatement, is that claim (or any part of it) statute-barred?
25. If the Claimants or either of them are entitled to recover damages for negligent misstatement, what is the correct measure and quantum of each of their damages? Without prejudice to the generality of this issue, which of the Scenarios A to C from paragraphs 35JA to 35JC of the Particulars of Claim applies?"
Approach to construction.
"Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract". Investors Compensation Scheme Ltd v West Bromwich Building Society  1 WLR 896 at 912 – 913.
"The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result, the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make their intention abundantly clear."
And The Antaios  AC 191 at p.201, Lord Diplock said:
"… if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must yield to business commonsense."
I bear business common sense in mind but also the limitations on that concept helpfully summarised by Hamblen J in Cottonex Anstalt-v- Patriot Spinning Mills  1 Lloyd's 615 at 621 -2. (Not cited by or to the parties):
As is now commonplace, I was referred in relation to the issue of construction to the guidance provided by the Supreme Court in Rainy Sky SA v Kookmin Bank  UKSC 50,  1 All ER 1137,  1 WLR 2900.
 As is now equally commonplace, both sides contended that their interpretation of the contract made more business common sense and should therefore be preferred – "where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense" – per Lord Clarke at 30.
 The assumption underlying the argument made in this and, in my experience, many other cases is that the interpretation which makes most business common sense is to be preferred. However, this is an oversimplification.
 First, the approach of adopting "the interpretation which is most consistent with business common sense" only applies where the court considers that the words in issue have "more than one potential meaning" – per Lord Clarke at 21. If the court concludes that the words are only capable of one meaning then that is their meaning regardless of considerations of business common sense.
 Secondly, where the words in issue have more than one potential meaning there is no rule of law or construction which requires the court to give effect to the interpretation which is most consistent with business common sense. It is "entitled" to prefer that interpretation (per Lord Clarke at 21) and it may be "generally appropriate" to do so (per Lord Clarke at 30), but it is not bound so to do. The more ambiguous the meaning and the stronger the business common sense arguments the more likely it is to be appropriate to do so.
 Thirdly, it will only be appropriate to give effect to the interpretation which is most consistent with business common sense where that can be ascertained by the court. In many cases that is only likely to be so where it is clear to the court that one interpretation makes more business common sense. If, as frequently happens, there are arguments either way the court is unlikely to be able to conclude with confidence that there is an interpretation which makes more business common sense. It is often difficult for a court of law to make nice judgments as to where business common sense lies.
 The importance of the court being able to ascertain which interpretation makes more business common sense and, where it can, that there is no "overriding criterion of construction" that that interpretation is to be preferred was emphasised by Aikens LJ in BMA Special Opportunity Hub Fund Ltd and others v African Minerals Finance Ltd  EWCA Civ 416 at 24:
"There has been considerable judicial exposition of these principles by the House of Lords and the Supreme Court in recent years [Chartbrook Ltd v Persimmon Homes Ltd  1 AC 1101; Re Sigma Finance Corp  1 All ER 571 and Rainy Sky SA v Kookmin Bank  1 WLR 2900] There is no point in my going over the same ground again at any length. The court's job is to discern the intention of the parties, objectively speaking, from the words used in the commercial document, in the relevant context and against the factual background in which the document was created. The starting point is the wording of the document itself and the principle that the commercial parties who agreed the wording intended the words used to mean what they say in setting out the parties' respective rights and obligations. If there are two possible constructions of the document a court is entitled to prefer the construction which is more consistent with 'business common sense', if that can be ascertained. However, I would agree with the statements of Briggs J, in Jackson v Dear  EWHC 2060 at 40 first, that 'commercial common sense' is not to be elevated to an overriding criterion of construction and, secondly, that the parties should not be subjected to '. . . the individual judge's own notions of what might have been the sensible solution to the parties' conundrum'. I would add, still less should the issue of construction be determined by what seems like 'commercial common sense' from the point of view of one of the parties to the contract."
"The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents."
"When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party's intentions."
Mr Downes also relies on another part of that judgment at paragraphs 36-41 which begins:
"36… In Investors Compensation Scheme Ltd v West Bromwich Building Society, Investors Compensation Scheme Ltd v Hopkin & Sons (a firm), Alford v West Bromwich Building Society, Armitage v West Bromwich Building Society  1 All ER 98 at 114–115,  1 WLR 896 at 912–913, Lord Hoffmann set out the principles which the court should apply when interpreting documents in five propositions. Most of the content of that passage is unexceptionable, although, in one or two places, the language in which the propositions are expressed may be a little extravagant; thus, the words 'absolutely anything' in his second proposition required some qualification from Lord Hoffmann in Bank of Credit and Commerce  1 All ER 961 at ,  1 AC 251 at .
37. However, the second sentence of Lord Hoffmann's fifth proposition in Investors Compensation is controversial. That sentence reads, so far as relevant:
"… if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had."
38. Lord Hoffmann took that approach a little further in Chartbrook Ltd v Persimmon Homes Ltd  UKHL 38 at –,  4 All ER 677 at –,  1 AC 1101. Having observed that the exercise of interpretation involves "deciding what a reasonable person would have understood the parties to have meant by using the language which they did" and referring to the "correction of mistakes by construction", he said this:
"[T]here is not, so to speak, a limit to the amount of red ink or verbal rearrangement or correction which the court is allowed. All that is required is that it should be clear that something has gone wrong with the language and that it should be clear what a reasonable person would have understood the parties to have meant."
39. In a forcefully expressed article, "Construction" and Rectification after Chartbrook"  CLJ 253, Sir Richard Buxton has suggested that Lord Hoffmann's approach to interpretation in these two cases is inconsistent with previously established principles. Lewison on The Interpretation of Contracts ((5th edn, 2011, Sweet & Maxwell Ltd) para 9.03, footnote 67, in an illuminating chapter dealing with mistakes) suggests that Sir Richard has made out "a powerful case for the conclusion that the difference between construction and rectification has reduced almost to vanishing point", if Lord Hoffmann's analysis is correct… "
 The conclusion I would reach is that there is no clearly established case for departing from the exclusionary rule. The rule may well mean, as Lord Nicholls has argued, that parties are sometimes held bound by a contract in terms which, upon a full investigation of the course of negotiations, a reasonable observer would not have taken them to have intended. But a system which sometimes allows this to happen may be justified in the more general interest of economy and predictability in obtaining advice and adjudicating disputes. It is, after all, usually possible to avoid surprises by carefully reading the documents before signing them and there are the safety nets of rectification and estoppel by convention. Your Lordships do not have the material on which to form a view. It is possible that empirical study (for example, by the Law Commission) may show that the alleged disadvantages of admissibility are not in practice very significant or that they are outweighed by the advantages of doing more precise justice in exceptional cases or falling into line with international conventions. But the determination of where the balance of advantage lies is not in my opinion suitable for judicial decision. Your Lordships are being asked to depart from a rule which has been in existence for many years and several times affirmed by the House. There is power to do so under the Practice Statement (Judicial Precedent)  1 WLR 1234. But that power was intended, as Lord Reid said in R v National Insurance Comrs, ex parte Hudson  AC 944, 966,  1 All ER 145,  2 WLR 210, to be applied only in a small number of cases in which previous decisions of the House were "thought to be impeding the proper development of the law or to have led to results which were unjust or contrary to public policy". I do not think that anyone can be confident that this is true of the exclusionary rule.
 The rule excludes evidence of what was said or done during the course of negotiating the agreement for the purpose of drawing inferences about what the contract meant. It does not exclude the use of such evidence for other purposes: for example, to establish that a fact which may be relevant as background was known to the parties, or to support a claim for rectification or estoppel. These are not exceptions to the rule. They operate outside it
Issue 1. Is there any material difference between the parties as to the meaning of the term 'Engineering Changes' and, if so, what?
"Q. Just terminology. But would you agree with me and I put it to you that this is too restrictive, it's not minor changes, it's any changes, that is what you have agreed with? You have agreed?
A. Any changes should go through a change control process, yes.
Q. And it's not just minor changes which are engineering changes?
A. All changes."
"Q. Then it must follow, must it not, that the engineering change, the concept of engineering change in the industry, is a narrow concept? A. The definition of an industry change is a narrow concept, yes… Q. When one carefully reads your evidence -- in fairness to you, Mr Arwine, when one carefully reads your statement, what you are in fact saying is that the industry definition is a narrow concept but it doesn't have to be the case. A. That is correct." (T21/121).
"Q. In your first report you identify limitations, firstly, shouldn't require new invention, secondly, should be feasible and, thirdly, should generally have a predictable outcome?
A. Right, and those three are interrelated obviously.
Q. So it wouldn't be right to say that any change can be achieved by an engineering change. One has to weigh in those factors that are in your first report?
"A. I don't think the report is inconsistent. Maybe I can explain to his Lordship. A change to a product, let's say you have a motor running on production lines, if you do a change there is always a risk that with the change you have some problems which you don't see in the beginning. And if you have a problem in the motor there might be a problem with the steering system or maybe, in the worse case, a problem with the car. So changing something has to be judged very carefully by engineers, by every people, to see whether the benefit I expect with the change is not compromised by any risks of deficits in producability on the TRW line, on the Renault line or especially in safety for the driver. Therefore, especially in the safety-critical area of power steering motors, any change can be risky very quickly. And if you now put together many small changes, which in itself are small changes like engineering changes, the more and more you put together you get a complexity of risks which no customer like Renault or TRW would accept, they would say: if you change too much you have to go through complete validation, complete risk analysis before we put this to the customer. And this is what I mean with complexity."
Issue 2. "In respect of motors and leadframe assemblies for the Renault P1 Platform, does the term "Product" include motors and leadframe assemblies built to different specifications from the Globe Gen 1 specifications, where the Defendants required those motors and leadframe assemblies for the platforms identified in the Agreement; those motors were comprised of motors and leadframe assemblies initially produced by the Claimants but with changes to their specifications or other requirements; and where the Claimants could and would have produced those motors and leadframe assemblies by making Engineering Changes to the motors and leadframe assemblies that it initially supplied to the Defendants under the Agreement, under Article 4.1?"
"17A. "The Products" included:Motors and leadframe assemblies built to different specifications where: (1) TRW required those motors and leadframe assemblies for the platforms identified in the Agreement; (2) those motors and leadframe assemblies were comprised of the motors and leadframe assemblies initially produced by the Claimants but with changes to their specifications or other requirements; and (3) Globe could and would have designed and manufactured those motors and leadframe assemblies by making only Engineering Changes to the motors and leadframe assemblies that it initially supplied to TRW under the Agreement, being as set out in paragraph 17A(a) above."
a) prevent TLVES from reducing the price/cost of motors for the life of the platforms specified,
b) exclude competition in relation to the development of new motors for the specified platforms,
c) require TLVES to devote potentially unlimited additional resources to accelerating new product development,
d) restrict TLVES's choice of appropriate technology for the construction of motors for the specified platforms,
Given the ferociously competitive nature of the automotive industry, it is overwhelmingly improbable that the parties would have regarded these as reasonable or acceptable restrictions for the long term. The Court should therefore be looking for clear words that would indicate that these were indeed the intended consequences of the Agreement on its true construction.
Issue 3. Are "Products" for the Renault P1 Platform limited to a 38Nm EPAS system, as contended by the Defendants?
"Q. We know, don't we -- and do say if you don't know -- that in relation to the P1 there were two variants that were being looked at for the motor: there were motors for a 38 Newton metre system, and motors for a 42 Newton metre system at this stage. Do you remember that?
A. At least that many, yes.
Q. Yes. The 38 Newton metre, that became the J77 before it went over to the Gen 2?
A. I'm not certain of that, I believe so.
Q. The more powerful system, the 42 Newton metre system, the motors for that, that system is what then became the B85?
A. The higher powered one I believe is correct. I'm not sure what the Newton metre rating of the system ended up being.
Q. You recollect that it was the more powerful system?
-Globe's table of estimated volumes dated 5th March 2001, which recorded that for the Renault P1, the J77 and C89 were 38Nm systems, and the B85 Clio was a "38Nm/42+Nm system", and that "May '01 is platform award timing" . The document includes the following note, handwritten by Mr Keegan:
"Keegan, re-quote Nissan @ a) lower volumes b) reduced capital and tooling req'd"
-Mr Keegan attended a meeting with Mr Fearon and other TRW staff, and Renault representatives on 14th March 2001 where it was recorded that "TRW for B platform (W85) is developing a new motor with Emerson". Mr Fearon also confirmed that the minutes had been circulated to those present which obviously included Mr Keegan.
-In an email to Mr Keegan dated 22nd May 2001 in respect of TLVES needing more information about amortisation and cost for the Nissan motor, Mr Fearon referred to the tooling amounts quotes on 9th October 2001 for the 38Nm motor.
-The fact that Mr Lamy in his hand-written comments on the draft Agreement at, faxed on 26th April 2001, circled "38Nm" in the phrase "motor and leadframe assembly for the 38Nm Nissan B/Renault P1" in Article 1.1 of the Agreement, and wrote "only one motor for the P1?" suggests strongly that Mr Lamy, as well as Mr McHenry and Mr Keegan, knew that the P1 platform included sub-platforms, or variants with more than one power rating, and that the Agreement only covered one variant. (I point out straightaway that Mr Lamy was not involved in the detailed discussions and was posing a question to someone who was. The remark could have all sorts of possible implications- all as I see it inadmissible. It tells us nothing about shared aim.)
-The volumes table that Mr Keegan saw and wrote upon, dated 5th March 2001 appears to have formed the basis for the volumes table at Article 1.2 of the Agreement.
|Nissan B/Renault P1 38Nm||225k||475k||743k||1081k||1081k|
-the broad definition of "Products" capable of permitting modifications and changes over the life of a platform; or
-the life of platform commitment at Article 5.1; or
-references to the Renault P1 platform.
Issue 4. Are the Claimants obliged to implement Engineering Changes proposed by the Defendants under Article 4.1?
"Many of the cases in which this issue has arisen involve contracts for the supply of goods where either quantity, quality or price is expressed in non-specific terms. In Hillas & Co Ltd v Arcos Ltd itself the timber sold was to be "of fair specification". The court's attitude has been to attempt to give effect to the contract by resorting to market rates and prices or to trade standards which provide objective criteria for the determination of what the parties agreed. Where such criteria exist and are ascertainable then a term of reasonableness is often implied in order to incorporate them as the measure of performance required under the contract."
Issues 5 to 9 - factual disputes about the Gen 1 and Gen 2 motors-the broad picture
The expert witnesses
"In the automotive industry an "Engineering Change" is a known term and known company-standardized procedure with strict rules to be followed along that change. An engineering change includes any change to a product: it may therefore include changes to the product itself, its drawings, materials, specification, production or other processes.
Looking to the many engineering changes documented and applied to the Gen 1 it is obvious that those engineering changes were gradually changing the existing product... .
The Globe Gen 2 motor does not comply with the Gen 2 motor specification:
The tight tolerances in the electromagnetic design such as 3% tolerance for resistance and inductance balance are not accepted by Globe;
The Globe Gen 2 motor does not have a skewed rotor with a 3 piece stagger as specified; and
The specified inductance values are not accepted by Globe.
Scott Arwine on behalf of Globe has referred to a "functional specification" of the DEAS motors and has said that Globe could have made a Globe Gen 2 motor that complied with that functional specification.
From my point of view a "functional specification" does not exist in the motor business. The only relevant document is the motor specification. I do not know exactly what Scott Arwine is referring to when he mentions the functional specification. It might be the motor specification. However reading the explanations in SA2/13.4 and the following chapters I can only conclude that he is extracting his own and particular subset of specifications from the different motor specifications (Gen 1, Gen 2, B2E) and calling it a functional specification. However this is risky and not correct.
From the documents I have seen I would say that eventually Globe could and would have designed motors and leadframe assemblies that complied with its Gen 2 "functional specification". However this would have needed enough development time, engineering resources and investments in tools, machines and supplier parts; and I do not believe that Globe could have done this within the time available given the history of their quoting for the Gen 2 in 2002/3 and the B2E in 2005.
Globe's Gen 2 still would not have met the Gen 2 specification however. In the case of non-compliance Globe is seeking to negotiate the specification parameters (e.g. inductance) and tends to argue that other parameters, which Globe would be able to achieve, would have been equal or even better for TRW. I do not consider this to be fair or correct.
Globe's Gen 2 motor has never existed and never would have met the Gen 2 motor specification. Whilst Globe was willing, it was neither ready nor able to supply motors to TRW that could be used for the Renault program at the time, nor would it have been even if it had been given the final DEAS Gen 2 specification in 2002."
"We agree that the Globe Gen 2 did not meet DEAS Gen 2 specifications as follows:
a ) The motors proposed by Globe for Gen 2 do not meet TRW 's minimum inductance specification.
b ) TRW Gen 2 .1 spec requested a skewed magnet rotor for Gen 2 .1 while Globe proposed a skewed stator. TRW removed this request for Gen 2 .5.
9 .6 Globe 's proposed Gen 2 motors incorporate Globe 's Gen 1 motor technology which utilizes a full -round skewed stator and an un -skewed rotor (having 6 long magnets ), whereas DEAS ' Gen 2 motors utilize a skewed magnet rotor (having 18 smaller magnets ) and a segmented unskewed stator"
"Dr Sidman …had developed a very simple technique for resisting cross-examination: he simply refused to answer the questions as put. He sounded like a politician who had undergone media training: he listened to the question asked, and then answered a different question, ie the one that he would prefer to answer."
Main differences between Gen 2 and Globe Gen 2.
"6 Were we open to other options? I guess if something
7 had gone wrong with the segmented options we would have been.
8 Q. And price as well. If you had had for example
9 a standard stator at competitive or lower price that
10 would have driven the decision, wouldn't it?
11 A. There is no doubt the price would always be part of this
13 Q. Yesterday you told his Lordship that if the price was
14 lower by 10 euro it would have been a different
15 consideration, correct?
16 A. The point I was making to his Lordship was that I am
17 just an engineer, the work I do is funded by the product
18 line, and if there was a sufficiently strong incentive
19 I would have been instructed to work on something other
20 than the segmented. It is not me that decides what the
21 business does.
22 Q. No, but there were many other things, it was not just
23 always TRW's requirement that there be a segmented
24 stator. Your mind was open to other architectures and
25 topologies as well, it is just that you were going down
1 that track as your primary option but there were others
2 as well, correct?
3 A. For the RFQ spec in 2002, we definitely wanted a 12/10,
4 we thought it was the right way, and that had to be
5 a segmented because of the parameters in
6 the specification. But would we have changed that?
7 Yes, and we did.
8 Q. So it was still open to change and your mind was still
9 open, it was not a fixed requirement that you always
11 A. Our primary candidate was the 12/10 segmented and we
12 went with that as long as we could stay on that course.
13 And it was only at the last resort that we had to
15 Q. But you were knocked off that course, weren't you?
16 A. We were."
"Would the lower inductance have an impact on compliance with Renault's requirements for torque-speed at a systems level and therefore require a concession on those requirements? I do not know and to find out would require a top level analysis of all areas of the flow down. I do not have that information and it would take a considerable amount of time to get the answer. I however strongly suspect that it would impact compliance with Renault's torque vs. speed requirements, and then to deviate from compliance with it would require TRW to have to seek a concession from Renault which may or may not have been given."
"A. I do not fully agree because you have to develop a motor according to a motor specification and you have to pass then all the testing, and only when you have passed the testing do you know that the motor will do what it should do. And then it goes into production and you need these production parameters and end-of-line tests so I think a question of time. So you start a development and you have to develop a motor which meets that motor specification, to my understanding. Once you have done this, you have shown this by DV testing, PV testing, then you go into production, you define probably other tests and try to see on the line, is this a good motor or a bad motor? So you see that the end-of-line testing is go/no-go criteria while the other one is a specification-dedicated testing."
12 Q. You would have taken whatever you needed to, to get this
13 work done and done properly, wouldn't you? You are
15 A. We offered Renault what we thought was appropriate and
16 what was the best technology at the time.
17 Q. I am not asking what you did, I'm asking you what you
18 would have done if you had had to work with my clients,
19 and against the background of your 2.5 revision, you
20 would have taken them my clients' technology and made
21 sure it worked?
22 A. Correct
"MR DOWNES: So when his Lordship comes to answer the question: could Globe have manufactured a Gen 2 motor to the specification, the rev B specification, the answer is "no"?
Q. You are agreeing with me?
A. Based on this information, yes."
"Q. I think it follows from the answers that you have given already that the hypothetical Gen 2 is not, you accept, a direct substitute for the rev B specified Gen 2?
A. For the rev B substitute, yes.
Q. It is not a direct substitute for the 188 specified Gen 2?
Issue 5. What were the relevant specifications of the DEAS Gen 2 that the Defendant supplied to its customers for the Platforms?
Issue 6. What were the material differences between the specifications of the Globe Gen 1 and the relevant specifications of the DEAS Gen 2?
Issue 7. Do the changes the Claimants allege they could and would have made to the Gen 1 and/or J77 motor and leadframe assemblies to manufacture their own Gen 2 motor and leadframe assemblies (Globe Gen 2) constitute "Engineering Changes" under Article 4.1 of the Agreement?
"9.6 There are other single items like eg the high resolution encoder (line L) which is a completely new device with high complexity in function and tolerance stack-up that to my understanding is no engineering change.
9.7 For making the Globe Gen 2 motor we have to include all the "modify" plus all the "new" items from Table 10 together into the motor at once. This is an accumulation of technical complexity. Resolving all the technical, tool, process and validation requirements is a huge challenge.
9.8 To my experience that would never be engineering change but a new motor design. It could not be handled through the engineering change process."
"A change to a product, let's say you have a motor running on production lines, if you do a change there is always a risk that with the change you have some problems which you don't see in the beginning. And if you have a problem in the motor there might be a problem with the steering system or maybe, in the worse case, a problem with the car. So changing something has to be judged very carefully by engineers, by every people, to see whether the benefit I expect with the change is not compromised by any risks of deficits in producability on the TRW line, on the Renault line or especially in safety for the driver. Therefore, especially in the safety-critical area of power steering motors, any change can be risky very quickly. And if you now put together many small changes, which in itself are small changes like engineering changes, the more and more you put together you get a complexity of risks which no customer like Renault or TRW would accept, they would say: if you change too much you have to go through complete validation, complete risk analysis before we put this to the customer. And this is what I mean with complexity."
Issue 8. Could and would the Claimants have implemented those changes [the "Engineering Changes" referred to in Issue 7] to the Gen 1 and/or the J77 motor and leadframe assemblies and, if so, within what period of time could they have done so?
"Q. If we are talking about start of production in 2005 and you need two years from design to delivery, and an early version of your design is only available in 2013, am I right in thinking the only way that the motor built to your hypothetical design could be available in 2005 is with a time machine?
A. I would disagree with that, because I believe when we spoke about that last week when I put myself back in time we wouldn't have proposed this theoretical design, we would have proposed the 15/10. At that time we had a design as best we could in that 2003 timeframe, but we still didn't have all the information we needed. So I wouldn't -- putting myself back in 2003 timeframe, what would I design, it would not have been this theoretical design, it would have been the 15/10 that we proposed at the time."
"… TRW is now rumbling about getting Gen II samples, they seem to be getting serious. It that hits, we will be swamped during the Porto crunch time. Delphi seems to have a life of its own and who knows where Motorola is going. I am on a workload whipsaw, I seem to be either worrying about no work or too much."
Issue 9 Would the Globe Gen 2 meet the relevant specifications of the DEAS Gen 2 and/or constitute a direct substitute for that motor?
Issue 10. If, by making only Engineering Changes to an existing Product, the Claimants could and would have made the Globe Gen 2 as direct substitutes for the DEAS Gen 2 then: (a) under the Agreement was the Defendant obliged to buy all its requirements for Products from the Claimants and hence, should the Defendant have bought all its requirements for Products that were met by the DEAS Gen 2 (or by its own manufacture of an equivalent) from the Claimants? or
(b) was the Defendant free to purchase the DEAS Gen 2 motors and/or manufacture the equivalent thereto itself?
Issue 11. Between which dates and for which vehicle model types on the Renault P1 Platform did the Defendant purchase the DEAS Gen 2 and/or manufacture equivalent motors and leadframe assemblies itself?
Issue 13. (a) Is the Second Defendant liable for breaches of the Agreement after 30 December 2006? (b) Are the claims against the Second Defendant in respect of breaches between 30 December 2006 and 25 September 2007 statute barred?
"There is reliance on the case of Tito v Waddell (No.2)  Ch 106 (see footnote 35). However this is misconceived: in that case reference was made to the principle of conditional benefits and burdens based on the decision of Denning MR in ER Ives Investment v High  2 QB 379 (see at p.295). In the case of Ives, the claimant's predecessor in title had granted the defendant a right of way in exchange for the defendant's agreement to allow a part of a construction to encroach onto the defendant's land. The right of way was not registered. Thus the claimant said that the right of way was invalid. The defendant counterclaimed for a mandatory injunction to require the block of flats to be demolished. Denning MR said at p.394:
"When adjoining owners of land make an agreement to secure continuing rights and benefits for each of them in or over the land of the other, neither of them can take the benefit of the agreement and throw over the burden of it. This applies not only to the original parties, but also to their successors."
It is important to note that in this case the "burden" was not being used as a "sword" so as to found a claim that would otherwise not have been available; but rather as a "shield" as a means of defending a claim for relief.
The main cases cited in Tito (for example Aspden v Seddon (No.2) 1 Ex D; Westhoughton v Wigan  1 Ch 159; Chamber Colliery v Twyerould (1893)  1 Ch 268) and Tito itself all concern rights over land such as mining rights etc and that a party enjoying the rights must also as a condition of that enjoyment observe the obligations that went with them. In Tito this was an obligation to make good the land after the period of phosphorous extraction had ended in 1999.
This is to be contrasted with cases which do not concern land, and in respect of which there appears to be no precedent for the ability of a party who is not a party to the contract in question to claim rights under it. Thus in Barker v Stickney  1 KB 121 (referred to at p.300 of Tito) the author of a book assigned the copyright to a publishing company that agreed to pay a royalty to him. The copyright was later assigned to another company, but the author could not recover the royalty from the subsequent assignee."
Issue 14. Are the Claimants estopped from bringing this claim for the reasons alleged by the Defendants in paragraphs 65 to 67 of the Defence?
"The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with cases. That is why I have not gone through them all in this judgment. It has evolved during the last 150 years in a sequence of separate developments: proprietary estoppel, estoppel by representation of fact, estoppel by acquiescence, and promissory estoppel. At the same time it has been sought to be limited by a series of maxims: estoppel is only a rule of evidence, estoppel cannot give rise to a cause of action, estoppel cannot do away with the need for consideration, and so forth. All these can now be seen to merge into one general principle shorn of limitations. When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands."
"It is settled that an estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being either shared by them both or made by one and acquiesced in by the other. The effect of an estoppel by convention is to preclude a party from denying the assumed facts or law if it would be unjust to allow him to go back on the assumption …"
-RFQs were sent in respect of products not covered by the Agreement. Unless the products identified in such RFQs were added to the Agreement pursuant to the "mutual agreement" provisions in Article 1.1, RFQs must have been for products not covered by the Agreement.
-The pricing of the J77 was negotiated on the basis that the products Globe had been asked to produce for the J77 were not covered by the Agreement because the price was negotiated from scratch (rather than from the basis of pricing for existing products under the Agreement.
-The fact that Mr Keegan, in a letter to Mr Schmitz, dated 28th November 2003 in respect of the J77 wrote:
"As you are aware, this product [the J77] was not included in the original agreement for the supply of EPAS products. Addition of product or products to the agreement is by means of mutual agreement…Globe Motors, at this time, has not agreed to the addition of this product to the original agreement …"
-That on receipt of the RFQ for the Gen 2 products on 10th April 2002, Globe did not suggest that TLVES was obliged to source Gen 2 from Globe. Additionally, it is clear that Globe did not suggest that the engineering change process should be engaged to develop and price changes to the Gen 1 product to meet the Gen 2 specifications.
-Globe did not suggest when it received a letter dated 16th August 2002 from Hans Heckmann entitled "Nomination for EPS motor J77/B85 Gen 2" [F7/1777] that the letter was superfluous, or that there was anything amiss with sending such a letter, because they were already entitled to the Gen 2 business.
-There was also no such reaction to an email from Mr Schmitz to Mr Keegan dated 3rd December 2002 [F7/1934] in which Mr Schmitz wrote:
"Please acknowledge that this is part of the overall process of finalising Supplier Nomination for Renault Gen 2 business."
-An email from Mr McHenry to Mr Heckmann dated 20th December 2002 [F7/1985] entitled "Capital Liability Reduction" in which Mr McHenry wrote:
"Any additional benefit to TRW from a financial point of view would have to carry with it some form of commitment to Globe of certain participation in Gen II production."
-The letter from Mr Keegan to Mr Schmitz dated 28th November 2003 in respect of the J77 [F10/2760] quoted from above.
"TRW's limited resources have eliminated Globe Motors from the Gen II … We have intimate knowledge of commitments made to the competition even prior to the start of manufacturing the Gen 1. This is clearly a violation of Article 5 (life of platform commitment) …"
Issue 15. In the event that the Defendants (or either of them) are found to have acted in breach of the Agreement, are the Claimants entitled, as they allege, to recover damages in respect of:
(a)loss of profits in respect of the sales which the Claimants would have made to the Defendant if the Defendant had not acted in breach of the Agreement; and/or
(b)restitutionary damages in respect of such sums of money that have accrued to the Defendant and which, but for its alleged breaches, would not have done?
"The court, in my view, has to conduct a factual inquiry as to how the contract would have been performed had it not been repudiated. Its performance is the only counter-factual assumption in the exercise. On the basis of that premise, the court has to look at the relevant economic and other surrounding circumstances to decide on the level of performance which the defendant would have adopted. The judge conducting the assessment must assume that the defendant would not have acted outside the terms of the contract and would have performed it in his own interests having regard to the relevant factors prevailing at the time. But the court is not required to make assumptions that the defaulting party would have acted uncommercially merely in order to spite the claimant. To that extent, the parties are to be assumed to have acted in good faith although with their own commercial interests very much in mind."
"[t]he next task is to quantify the loss. Where that involves a hypothetical exercise, the court does not apply the same balance of probability approach as it would to the proof of past facts. Rather, it estimates the loss by making the best attempt it can to evaluate the chances, great or small (unless those chances amount to no more than remote speculation), taking all significant factors into account: see Davies v Taylor  AC 207 , 212, per Lord Reid, and Gregg v Scott  2 AC 176 , para 17, per Lord Nicholls of Birkenhead, and paras 67–69, per Lord Hoffmann."
Vasiliou v Hajigeorgiou  EWCA Civ 1475 adopted the Parabola approach at  where Patten LJ said:
"Where the quantification of loss depends upon an assessment of events which did not happen the judge is left to assess the chances of the alternative scenario he is presented with. This has nothing to do with loss of chance as such. It is simply the judge making a realistic and reasoned assessment of a variety of circumstances in order to determine what the level of loss has been."
Issue 16. If the Claimants (or either of them) are entitled to recover damages in respect of all or some of the above, what is the quantum of each of their loss and damages?
(Gen 2 Price x Gen 2 Volumes) - Globe's Estimated Gen 2 Costs = Loss of Profit
"The first point is this: this is not the sort of case where one can be fairly certain that Porto would have made a profit. In most loss of profit cases the courts start from the principle of, well, yes, I know all of this stuff but the chances are they would have made some profit. The reason that your Lordship can't be certain of that is that they in fact made losses in the later years, significant losses, and we get those from the audited accounts. We know the reason that they made losses, or one of reasons, was because of the increase in cost of certain raw materials and in particular magnets, and we know that the Exclusive Supply Agreement gave Globe no protection on that front. So it isn't the case where you say, well, chances are they would have made a profit. It could have been a poisoned chalice. They did in fact make losses over several years on the Gen 1 products.
Globe's response is not to deny what is on the face of the accounts that show Porto to be loss making after 2008 but to rely on evidence from Mr Pinto that with the volumes involved with Gen 2 the business would still have been profitable. ..
The second thing is the effect of the engineering change price adjustment mechanism meant that the profit per motor stayed constant. I put that to Mr Pinto, he accepted it, and it is mathematically inescapable. You have your revenue figure for the old motor, you have your costs of the old motor, and that gives you your profit for the old motor. You change the motor, it costs you more, your revenue increases by those costs, that is Article 4, your costs increase by those costs, the end result is your profit per motor stays the same. Mr Pinto accepted that.
So one thing is for sure, that the engineering change pricing adjustment will not have enhanced the profit per motor. That was what it was.
The third point is that there are other cost fluctuations that would not be protected under the engineering change mechanism so there is no allowance for fluctuations in fixed or administrative costs, there is no allowance for costs of raw materials that are outside the Exclusive Supply Agreement. So one can find oneself in a situation where one is manufacturing the Gen 1 motors at a loss and then has to manufacture Gen 2 motors at a loss. That is not outside of the bounds of possibility.
Fourthly, the position your Lordship is faced with is that we have no live witnesses who have come to court and I have cross-examined on what they now say the price adjustment would actually have been. So no witness who says, and I have cross-examined on, it -- that is maintained at any rate, well, here is the Gen 1, here's the engineering changes, this is the end result. That surely was a fairly basic requirement, claimant coming to court.
Q. These are two different exercises, prepared for completely different times, for completely different purposes, by different people using different assumptions.
A. That is correct. I agree with that.
Q. Doesn't it fall foul of what you said earlier, that it is meaningless really?
A. It is. Unless you identify exact and you correct exactly what the differences are, yes, it is…
Q. Can I suggest to you that you can't really give evidence on the extent to which these differences were the result of engineering changes as opposed to changes in material costs, different suppliers, US versus Europe, VA/VE possibly, productivity improvements. It would be very difficult for you, wouldn't it, to identify how much of those changes are down to engineering changes?
A. That is correct. The way you -- the comparison that you are putting here, yes, it is very difficult to assess that difference because there are so many variables that we can't -- we can't control and identify all of them. Although the exercise that has been -- I look at -- I have looked at, and has been produced by Mr Fisher, does not rely on these kind of comparisons that we are doing between the two BOMs. Basic what relies is he's taking the price for the product and applying the engineering changes using the actual prices of the change that have occurred. The calculation that is being done here by Mr Fisher, what I mentioned I would agree to the methodology as well, is that, I mean, if that method was presented to me by someone, I could have agreed to that method. I do have agreed to the calculation, they are correct. I mean, there were some mistakes but I understand mistakes.
A. This exercise takes the price as the starting point. It is not comparing BOMs, it just takes the price as the starting point. The BOM that is included in that price has changes, and the change that has occurred to that BOM is priced at an actual cost and a very identifiable cost, and that is what has been taken out or added to that base price. That analysis can be done. This comparison cannot. You cannot compare the BOM that was produced in one year, or with five years difference, to the other without identifying and accounting for all the variables that were in place."
Your Lordship cannot infer, for example, that DEAS price increases would have been agreed with Globe. It's a wholly different contract, a wholly different commercial consideration, and, as is stated in the authorities, your Lordship must assume that we would have acted in our own best interest consistent with the terms of the contract. What is sometimes called "the rule of minimum compliance".
Issue 17. Does the Second Claimant have any right of action against the Defendant?
-From at least 8 January 2003, TLVES/TRW Ltd and/or their nominees ordered Products from Porto under the Agreement, in accordance with the contractual specifications and prices.
-Porto supplied Products to TLVES/TRW Ltd and/or their nominees under the Agreement, in accordance with the contractual specifications and prices, to their knowledge.
-Porto invoiced TLVES/TRW Ltd or their nominees for the supply of the Products at the contractually agreed prices, and corresponding payments were made to Porto for that supply.
-TLVES/TRW Ltd submitted to Porto warranty claims under Article 3.1 and Appendix B of the Agreement, rather than to Globe (as confirmed at §4.13(i) of Mr McHenry's witness statement).
-TLVES/TRW Ltd has submitted and continues to submit to Porto its volume forecasts of the Products under the Agreement as Mr McHenry's witness statement confirms.
-On 10 November 2005 Porto, not Globe that entered into an agreement with TRW to satisfy the consignment stock requirements of Article 1.7 of the Agreement.
-TLVES was not even told of the existence of Porto as a subsidiary. The suggestion that they might have guessed or assumed that would be the case is not sufficient.
-The management of Porto never considered or approved the undertaking of the potentially onerous liabilities associated with the Agreement.
-A decision by Porto to accept the liabilities of Globe would almost certainly be a matter that ought to have been the subject of Board approval. The absence of such consideration strongly points away from an implied agreement to this effect.
-The existence of the consignment agreement entered into between TLVES and Porto on 10th November 2005 does not support the Claimants' case but demonstrates that where a direct contractual link between TLVES and Porto was desired, it was established by a formal written agreement.
-Although there are documents that are consistent with Porto being a party to the Agreement (the invoices and orders), that is also consistent with Porto being an agent or some other form of intermediary.
-The invoices and orders themselves are ambiguous. There is an example in which the order is placed by Lucas Automotive GmbH as agent for the "Purchaser" which is in turn identified as being 10 entities none of which is TLVES.
-The shipping schedules that Mr Pinto raised in the course of cross-examination make no reference to TLVES, referring instead to TRW Electric Steering Limited. That document is perfectly consistent with Porto, as Globe's nominee or sub-contractor, agreeing with TRW (or TLVES) the timing of the product shipments.
-There is no evidence of any discussion or communication on the point whatsoever.
"The Court has been shown that the Defendants (or their nominees) engaged in a series of open, obvious and consistent dealings which constituted a variation to the basis of dealings provided for in the Agreement. There is no other commercially realistic explanation for what happened: i.e. the evidence of conduct unequivocally demonstrates an intention to add Porto to the contract (and, so, the fact of variation). In these circumstances, to find that Porto had not become a party to the Agreement would ignore the weight of all the relevant evidence."
-Express representation that TRW estimated that it would require the specified volumes (within the agreed +/- 15% variances) of Products for the Nissan B and Renault P1 platforms, such estimates being based upon the requirements of Nissan and Renault for the respective platforms; and/or
-Implied representations that (a) the Estimates were accurate estimates of the volumes of Products that TRW would require in respect of each of the named platforms; (b) TRW had real grounds to support those estimates; and/or (c) TRW was not aware of any factors that were likely to undermine the accuracy of the Estimates. The implied representations arise out of the Volume Estimates. By putting them forward, the representor impliedly stated that he was aware of facts or reasonable grounds justifying those estimates and hence that there were reasonable grounds for their accuracy.
"Further, most of the representations alleged involve representations as to the future ("was unlikely to be incapable"). A representation which speaks to the future is only a representation of fact in so far as it reflects a statement of expectation or belief or of an actual opinion held. However, no allegation of a representation of expectation, belief or actual opinion is made. In so far as the reasonable grounds representation may be said to do so impliedly, the belief relates only to "the facts" in the representations made – ie the present facts. Further, if, properly analysed, the representations are limited to the present facts then they are of such restricted scope that it is difficult to discern the alleged necessity for their implication."
Issue 19. Did the First Defendant owe a duty of care to the First Claimant as alleged in paragraphs 35B and 35C of the Particulars of Claim, and if so, what is the scope of that duty?
"…it seems to me that Hedley Byrne & Co Ltd v Heller & Partners Ltd  AC 465, properly understood, covers this particular proposition: if a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another – be it advice, information or opinion – with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable. If he negligently gives unsound advice or misleading information or expresses an erroneous opinion, and thereby induces the other side to enter into a contract with him, he is liable in damages. …
Applying this principle, it is plain that Esso professed to have – and did in fact have special knowledge or skill in estimating the through put of a filling station."
"There is no magic in the phrase "special relationship"; it means no more than a relationship the nature of which is such that one party, for a variety of possible reasons, will be regarded by the law as under a duty of care to the other. In this case [Esso] had all the expertise, experience and authority of a large and efficient organisation carrying on the business of developing service stations to sell their petroleum products through dealers who were expected to invest a substantial amount of capital in the business and to observe the detailed trading requirements laid down in the tenancy agreements."
"an assumption of responsibility coupled with the concomitant reliance may give rise to a tortious duty of care irrespective of whether there is a contractual relationship between the parties, and in consequence, unless his contract precludes him from doing so, the plaintiff, who has available to him current remedies in contract or tort, may choose that remedy which appears to him to be the most advantageous."
"It is, I consider, clear from the facts of Hedley Byrne itself that the expression 'special skill' is to be understood in a broad sense, certainly broad enough to embrace special knowledge. Furthermore Lord Morris himself, when speaking of the provision of a statement in the form of information or advice, referred to the defendant's judgment or skill or ability to make careful inquiry, from which it appears that the principle may apply in a case in which the defendant has access to information and fails to exercise due care (and skill, to the extent that this is relevant) in drawing on that source of information for the purposes of communicating it to another."
"A concurrent or alternative liability in tort will not be admitted if its effect would be to permit the plaintiff to circumvent or escape a contractual exclusion or limitation of liability for the act or omission that would constitute the tort."
" … I think it would take quite exceptional facts for a court to conclude that one party assumed a duty of care to the other going further than the contract required – all the more so where (as here) the parties were sophisticated businessmen with their own professional advisers."
(1) Unlike Globe, TRW had regular access to vehicle manufacturers (in particular, here, Renault) and that access enabled TRW to obtain the manufacturers' own volume estimates for use in the supply chain and to be provided to Globe.
(2) TRW carried out its own "sanity" checks as to the accuracy of the volumes that it received and disseminated to Globe.
(3) TRW was aware of the importance of the accuracy of those volumes and expected that they would be relied upon and used by Globe in order to assess its business case, set prices and assess likely profits and ensure manufacturing capacity requirements could be met.
(4) TRW disseminated the volume information widely within the TRW group of companies, particularly from the Paris sales office to TRW's offices at Holford (where Mr Connor and Mr Fearon were based at the relevant times) and to the US and the relevant TRW employees had access to the updated information and knew where to go to get accurate information.
(5) The imposition of the duty of care is reinforced by the close relationship between the parties, described by Mr Connor as being akin to a partnership.
(6) The amortisation provision in the Agreement is not an exclusion or limitation of liability. Rather, it provides for payment of and quantifies compensation for under-utilisation of tooling. There is nothing in the Agreement that precludes the existence of a duty of care, reliance upon the Volume Estimates or Globe's right to bring this claim.
"Q. You have only inserted a clause here that enables you to revisit the capital and tooling element of the price, haven't you?
A. That is correct.
Q. Why did you not insert any protection for Globe that would enable you to revisit the other elements of the price in the event that the volumes didn't come through?
A. I do not know."
"In this case the Plaintiffs had all the expertise, experience and authority of a large and efficient organisation carrying on the business of developing service stations to sell their petroleum products through dealers who were expected to invest a substantial amount of capital in the business and to observe the detailed trading requirements laid down in the tenancy agreements."
"The parties acknowledge and agree that Supplier shall recover its costs of tooling and capital by amortizing such costs over the units to be sold over the first five (5) years of this Agreement (''Recovery Period"). During the Recovery Period, the volume of Buyer's purchases of each Product shall be reviewed the first month of each year following the initial year of the agreement. In the event that the aggregate volume of Buyer's purchases of each Product during the preceding years is less than that which is provided in Article 1.2 above and such variance is greater than fifteen percent (15%), then Supplier shall adjust its pricing so as to amortize the remainder of Supplier's tooling and capital costs over the forecasted units to be produced for the remainder of the Recovery Period. …"
Issue 18. Did the First Defendant make the Volume Representations or any of them to the First Claimant (and, if so, which)?
-Whether or not the statements were made is a question of fact for the Court to determine on an objective analysis from the documents, read in their proper context.
-Whether any, and if so what, representation was made has to be judged objectively according to the impact that whatever is said may be expected to have had on a reasonable representee in the position, and with the known characteristics, of the actual representee.
-A statement of opinion may also carry with it an implied statement of fact that the maker knows facts which justify his opinion or has reasonable grounds for expressing the opinion. Such an implication may more readily be drawn where the representor is in a stronger position than the representee to know of, or to ascertain, the relevant facts.
-In particular, where facts are not equally known to both sides, a statement of opinion by one who knows the facts or is better equipped with information or the means of information to know the facts than the other, may involve a statement of fact insofar as he impliedly states that he knows facts which justify his opinion.
Issue 20. Was the First Claimant induced to and did the First Claimant rely upon the Volume Representations and the Estimates or any of them in entering into the Agreement (and, if so, which)?
Issue 21. At the date of the Agreement, were any of the Volume Representations (if made by the First Defendant) inaccurate or false or put forward in circumstances where the First Defendant had no reasonable grounds for believing the same were based on reliable and accurate Estimates?
Issue 22. Did the First Defendant act negligently and in breach of duty as alleged in paragraph 35E of the Particulars of Claim?
"I have reviewed the document titled Renault P1 Column Drive EPS System with the date 7 May 2001 in the top left hand corner). I recognise this type of document, although do not think I had seen the document before it was provided to me by TRW's lawyers. The fact that it has "GDPIM2 Executive Approval" at the top shows that it is part of the GDP Gateway system which is a recognised product management process. This document represents one of the Gateways and is part of the CQA (Commercial Quotation Approval) management process.
If I had seen this document, or any other document with lower volume estimates than the estimates to which we were working, or if I had been told by Renault or Nissan that there had been a change in the volume estimates, I am sure we would have discussed it at a weekly meeting as it would have a material effect on our business, including production planning, business planning etc.
I do not know who created the document dated 7 May 2001, I believe it is extremely unlikely that it was created by anyone within TLVES, given that it is headed 'TRW Chassis Systems', which suggests it is a document emanating from within the wider TRW Group in the US. I believe TRW Chassis Systems was an early TRW legacy group in North America. I am told by TRW's lawyers that it was found in the Paris sales office files, so it may be that is was produced in Paris to report on the Renault P1 project to the TRW management team based in the US, but as I have no first-hand knowledge of the document, this is just a guess."
"I have been shown an excel spread sheet entitled the Product Forecast Business Plan 2001 (AXP1/1-6). I have been informed by Wragge & Co LLP that this spread sheet was found on a CD located in the TRW Paris Sales office during the disclosure review which they undertook in early 2013.
This document has my name in the final column under the heading 'sales manager'. I understand that this document is dated 16 May 2001. Given the date of this document I must have been assisting Mr Laguette with the steering division at this time. The volume estimates from Renault would have been conservatively adjusted downwards to reflect a more conservative prediction of the actual sales that would have materialised.
I produced this document. Due to the lapse of time since this document was created, I cannot confirm exactly who had input into this document. Typically a number of different people within the TRW Paris Sales office would have assisted with the production of this document.
I do not recall the actual set of figures contained within this document. My understanding set out above is based on how I remember things generally worked in the Paris Sales office during this time.
I cannot remember where this document would have been sent. It is however likely that information such as that in this document would have been provided to members of the TRW Management office based in the US. This information could potentially have been used by officers in the US to measure the performance of individuals in the Paris sales team, such as Mr Laguette. It was neither in Mr Laguette's nor my interest to overestimate TRW's own internal analysis of potential volumes from customers in this type of document as one of the things we were judged against was sales achieved against sales forecasted. For this reason I remember Mr Laguette telling me to take a conservative approach to drafting any document such as this.
I have been shown a document titled Renault P1 Column Drive EPS System . Whilst I recognise the phrase GDPIM2 Executive Approval process, I have no recollection of this document nor do I recall having seen any other documents in this format…."
Issues 23 to 25.