GSP Fortuna Ltd v Dean International Trading SA

Summary judgment is appropriate only where the respondent has no real, rather than fanciful, prospect of success and there is no other compelling reason for a trial. The court must avoid a mini-trial, while testing whether factual assertions have real substance and considering evidence reasonably expected to be available at trial.

A contractual provision requiring amendments to be in writing is not necessarily conclusive. Clear evidence may establish a later oral variation or abandonment. Where contractual construction depends materially on the factual matrix, summary determination should be avoided. An estoppel by convention requires an assumption communicated between the parties, including through conduct, and acquiescence in that assumption may raise a triable issue.

GSP Fortuna Ltd and GSP Britannia Ltd sought summary judgment under CPR 24 for liquidated damages arising from separate agreements for the sale of offshore drilling units to Dean International Trading SA.

Dean alleged that the Britannia agreement had been orally abandoned. In relation to the Fortuna agreement, Dean argued that payment obligations were conditional upon the unit being capable of satisfying its technical specification at closing, and alternatively relied on estoppel by convention based on inspection arrangements and progress reports.

The central issue was whether Dean’s defences had a real prospect of success or whether the claims could properly be determined without a trial.

1. Disposition. The applications for summary judgment were refused. The court was not deciding whether Dean’s defences would ultimately succeed.
2. Summary judgment principles. Under Civil Procedure Rules 1998, rule 24.2, the relevant question was whether Dean had a realistic prospect of successfully defending the claims and whether there was any other compelling reason for trial. The principles summarised in EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), including the guidance from Swain v Hillman [2001] 2 All ER 91, ED & F Man Liquid Products v Patel [2003] EWCA Civ 472, Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550 and Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63, applied equally where a claimant sought judgment against a defendant.
3. Britannia agreement. Although the agreement required amendments or additions to be in writing, that provision was not conclusive. The principles stated in World Online Telecom v I-WAY [2002] EWCA Civ 413 meant that a sufficiently clear oral abandonment could not be ruled out summarily. Dean’s evidence, including the alleged telephone agreement and subsequent conduct, provided a realistic prospect of establishing abandonment. Questions of authority and credibility required trial.
4. Fortuna agreement. The contract contained an internal tension between the “As Is, Where Is” wording and the attached technical specification. It was arguable that the unit had to comply with that specification at closing and that the factual matrix might support consequential qualifications on earlier payment obligations. The court could not exclude that construction summarily.
5. Estoppel. Dean also had a realistic prospect of establishing an estoppel by convention. The requirement identified in K. Lokumal & Sons (London) Limited v Lotte Shipping Co Pte Limited [1985] 2 Lloyds Rep 28, that the relevant assumption must cross the line between the parties, was capable of being satisfied by communications and conduct concerning inspections and progress reports. Whether the sellers acquiesced in Dean’s asserted understanding was fact-sensitive.

First-instance decision. The judgment records that the two claims were consolidated by consent order, but it does not state any prior appellate decision.