AMEC Group Ltd. v Universal Steels (Scotland) Ltd

For a mandatory interim injunction, the court applies the American Cyanamid framework, while recognising that a positive order may create a greater risk of injustice than an order preserving the status quo.

The court should require a high degree of assurance that the claimant will establish its right at trial. Where the interim decision may effectively determine the dispute, the court must weigh that likelihood carefully against the risks of injustice. The adequacy of damages and the balance of convenience remain material, with particular weight given to irreparable practical consequences and the parties’ relative ability to compensate one another.

AMEC sought continuation and variation of an ex parte injunction requiring Universal Steels (Scotland) Ltd to deliver quality assurance documentation relating to four jetty piles. The documents were needed for Ministry of Defence approval before a limited installation window.

The parties disputed whether they had reached a binding agreement requiring AMEC to waive contractual claims and pay Universal Steels before receiving the documentation. The application concerned whether the existing injunction should be maintained and the documents released before trial.

1. Application granted. The injunction was varied so that the quality assurance documents could be provided to AMEC as soon as possible.
2. The court applied the three-stage approach in American Cyanamid Co v Ethicon Limited [1975] A.C. 396: whether there was a serious issue to be tried, whether damages were an adequate remedy, and, if necessary, where the balance of convenience lay.
3. Because the application sought a mandatory injunction, the court applied the guidance in Nottingham Building Society v Eurodynamics Systems Plc [1993] FSR 468. The court considered the risk of injustice if the order proved wrong, the greater risk ordinarily associated with a positive order, and whether there was a high degree of assurance that AMEC would succeed at trial. The approach was treated as the applicable guidance endorsed by Zockoll Group Limited v Mercury Communications Limited [1998] FSR 354.
4. The alleged August agreement was a serious issue, but the court had the necessary high degree of assurance that AMEC would establish at trial that no binding agreement had been made. The contemporaneous documents described only an agreement in principle, payment figures remained unidentified, substantiated costs had not been provided, no waiver of AMEC’s cross-claims appeared in the records, and Universal Steels had not asserted the alleged agreement in subsequent correspondence.
5. Applying NWL Limited v Woods [1979] WLR 1294, the possibility that the interlocutory decision might practically determine the dispute required particular care. It did not, however, justify withholding the documents. Damages would not adequately compensate AMEC for the loss of the installation window and the irreproducibility of the quality assurance evidence, whereas AMEC could compensate Universal Steels if the injunction later proved unjustified.
6. The balance of convenience favoured AMEC. The court applied the guidelines identified in Fellowes and Son v Fisher [1976] I QB 122, including the inadequacy of damages for AMEC, the adequacy of damages for Universal Steels, the strength of AMEC’s case, and the practical consequences of delay. Universal Steels was not deprived of a later oral trial; it was only prevented from using possession of the documents to obtain payment before its alleged entitlement had been established.