SPI North Ltd Swiss Post International (UK) Ltd & Anor (Rev1)

An opposed amendment should be permitted only where the proposed claim has a real, rather than fanciful, prospect of success. The court may decide a short point of law or construction summarily where it has the necessary material, but should assume genuinely disputed material facts in the respondent’s favour.

A term may be implied into a detailed commercial contract only where it satisfies the established requirements of necessity or obviousness, clarity, consistency with the express terms, and reasonableness. Whether a long-term commercial agreement is relational, so that a contextual duty of good faith may arguably arise, depends on its terms and commercial setting. Vague, unnecessary or duplicative implied terms should not be permitted to proceed.

The claimant had the exclusive right under a premium partnership agreement to market Swiss Post postal services in Northern England, Scotland and Wales. Following the formation of the Asendia joint venture, the first defendant ceased to be a Swiss Post subsidiary, transferred its business to the second defendant and promoted services under the Asendia brand. The claimant alleged that this conduct caused substantial loss.

At a resumed interlocutory hearing, the court determined the disputed parts of applications to amend and strike out the statements of case and for summary judgment. The principal questions were whether proposed terms concerning non-derogation, non-competition, good faith and prevention of performance had a real prospect of being implied into the agreement, and whether the proposed pleadings were sufficiently clear.

1. The applications were determined in part for each side. The claimant was permitted to plead limited implied obligations concerning non-derogation, non-competition and good faith. Other proposed obligations and related particulars of breach were refused or struck out. The defendants’ unopposed amendment to their defence was permitted.

2. An opposed amendment is governed by the same real-prospect test as an application for summary judgment. The court should undertake enough analysis to exclude a claim having no real prospect of success, without conducting an unduly prolonged inquiry or imposing a preliminary view where the claim is realistically arguable. Where material facts were disputed, they were assumed for this purpose to be resolved in the claimant’s favour: paras 5–10.

3. Applying Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, the court held that it was realistically arguable that the agreement contained an implied restriction preventing the first defendant from soliciting non-excepted customers through competing services, or from developing and marketing a competing brand and products within the exclusive territory. Those formulations could amount to non-derogation from the rights granted and could satisfy business efficacy or necessity: paras 75–82.

4. It was also realistically arguable that the agreement was a relational contract. The nature and terms of the relationship did not preclude the contextual implication of good-faith obligations under the approaches in Yam Seng Pte Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB) and Bates v Post Office Ltd [2019] EWHC 606 (QB). Permission was therefore given to plead specified good-faith obligations, subject to removing vague or unnecessary formulations: paras 78 and 83–84.

5. No further term was needed concerning the supply of the contracted products because the express agreement dealt with supply. An obligation to support the claimant’s efforts was insufficiently certain and the agreement did not establish any necessary level of continuing marketing activity. The proposed general obligation to act reasonably and fairly was also too vague and unnecessary: paras 79 and 83.

6. The proposed term preventing anything that might frustrate the contract’s purpose or the claimant’s ability to meet annual targets was refused. It identified no additional prohibited conduct, was not connected to any pleaded breach and duplicated the permitted non-derogation, non-competition and good-faith allegations: para 85. A revised pleading was ordered to reflect those conclusions: paras 87–88.

This was a first-instance resumed interlocutory hearing. HHJ Klein had previously determined two of six applications in June 2018 and adjourned the remaining four applications and all questions of costs. Master Shuman’s order of 17 August 2018 directed the resumed hearing. No reported appellate history is stated.