RAM Media Ltd v Ministry of Culture of the Hellenic Republic (Secretariat General of Sport)

A contractual payment obligation is not ordinarily conditional upon the other party’s prior performance unless the contract clearly makes it so. A best-endeavours obligation requires reasonable steps directed to achieving the contractual result; it does not necessarily impose an absolute obligation to succeed or permit the other party to monitor performance and withhold payment whenever progress is considered insufficient.

A refusal to pay contractual instalments only in accordance with a proposed variation, coupled with an intention to call on a performance guarantee, may amount to repudiation. A contractual termination procedure does not exclude the common-law right to accept repudiation unless the contract so provides. Rights unconditionally accrued before termination remain enforceable, and savings are deducted from damages, but not ordinarily from accrued debts or recovery of sums wrongly obtained under a performance bond.

RAM and the Ministry contracted for the staging in Athens of the 2006 FIFPro World XI Player Awards. The Agreement required the Ministry to pay staged hosting fees and required RAM to use its best endeavours to deliver an event of the specified standard, including securing the attendance of at least six award winners.

The Ministry withheld the third instalment, sought variations including an absolute attendance obligation and reduced consideration, and later called on a bank guarantee. RAM accepted the Ministry’s conduct as repudiation and claimed payment. The Ministry alleged contractual variation, breach by RAM, a condition precedent to payment, and an obligation to repay all instalments.

The central issues were whether the Agreement had been varied, whether the Ministry was entitled to withhold payment, whether its conduct was repudiatory, and what remedy followed.

1. Variation. No binding variation was concluded on 19 October or 27 October 2006. On 19 October there was a genuine misunderstanding as to whether RAM was to guarantee the attendance of five or six players and whether that obligation supplemented or replaced the existing best-endeavours obligation. The parties also failed to agree the mechanism for payment. The later discussions likewise did not produce a concluded agreement.
2. Condition precedent. The Agreement did not make RAM’s performance of its obligations a condition precedent to payment of the 15 October instalment. The staged payment structure did not establish the necessary relationship between each payment and particular services. The Agreement also contained a no-set-off provision and the Ministry had the protection of a first-demand guarantee. RAM’s contractual obligations were not expressed with the certainty required for the proposed condition.
3. The Ministry’s alternative construction of the best-endeavours obligation was rejected. The clause required an inquiry into whether RAM had used its best endeavours to secure the relevant result. It did not impose an absolute obligation to achieve that result, nor did it make payment conditional on the Ministry’s interim assessment of RAM’s efforts.
4. Repudiation. The Ministry’s conduct went beyond non-payment. From 19 October it made clear that it would pay only under a new contract imposing materially different obligations. It asserted that RAM was in breach and threatened, in substance, to call on the bank guarantee. This was an actual breach concerning the third instalment, an anticipatory breach concerning the fourth instalment, and repudiation of the Agreement. Clause V did not exclude the common-law right to accept repudiation, and a 30-day notice would have been futile.
5. Repayment and remedy. The cancellation clause was construed as applying to cancellation caused by matters beyond the parties’ reasonable control. It did not require RAM to repay instalments where cancellation resulted from the Ministry’s repudiation. RAM had an accrued right to the third instalment. The Ministry was also required to account for the €1.2 million obtained under the bank guarantee, because RAM was not in breach. Savings were relevant to damages but not to the accrued debt or the claim for an account of money wrongly obtained under the guarantee.
6. The Ministry’s late application to amend its case on savings and to adduce expert evidence was refused. The claim for administration costs and additional losses not pleaded was not before the court. RAM was entitled to judgment for €2.4 million.