Amadeus IT Group SA v Lycamobile UK Ltd

Summary judgment may be granted where the defendant has no real prospect of successfully defending the claim. A party alleging fundamental breach must identify the contractual term said to have been broken and explain how it was broken. A bare assertion of fundamental breach is insufficient. An alleged repudiatory breach which has not been accepted does not release the innocent party from its contractual obligations, particularly where the contract was terminated under an express termination clause. A claim for payment of a contractually specified minimum sum may properly be a debt claim rather than a claim for damages.

The claimant supplied advertising and transaction services to the defendant under a five-year agreement. The agreement required the defendant to order and pay for specified minimum numbers of advertising impressions, with a first-year minimum value of approximately €1.9 million. The defendant paid nothing and terminated the agreement on contractual notice.

The defendant resisted the claimant’s claim for the minimum sum, alleging fundamental breaches concerning reporting information, access to a transaction facility and implementation arrangements. It also initially disputed execution of the agreement. The claimant applied for summary judgment. The issues were whether the defence disclosed any real prospect of success and whether the claim was properly characterised as a debt claim.

1. Summary judgment. The claimant bore the burden of showing that the defendant had no real prospect of successfully defending the claim. On the documents and witness evidence, that burden was satisfied.
2. Execution of the agreement. The challenge to execution was hopeless. The parties had treated the agreement as operative, and the claimant’s signatory confirmed that he had signed it.
3. Alleged contractual breaches. The defendant did not identify any contractual term requiring the reporting, click-to-book facility or implementation arrangements relied upon. The agreement contained an entire agreement clause, and reliance on an unproduced pre-contractual document could not establish the asserted obligations. The available material also indicated that reporting information had been supplied and that no contemporaneous complaint had been made.
4. Fundamental breach and termination. A mere assertion of fundamental breach was insufficient. The defendant had not accepted any repudiation or alleged repudiation. It had terminated under the contractual notice provision. The alleged breaches might have supported a damages claim, but no counterclaim had been made. An unaccepted repudiation did not release the defendant from its contractual payment obligations.
5. Nature of the claim and order. On the proper construction of the agreement, the claim was for a debt rather than damages requiring assessment. Judgment was therefore entered for the claimant. The defendant was ordered to pay costs on the indemnity basis, assessed at £60,000.