Optimares S.p.A. v Qatar Airways Group Q.C.S.C.

A professionally negotiated commercial contract is construed principally by its text, read with the relevant contractual provisions, purpose, factual background and commercial context. Commercial common sense cannot be used retrospectively to improve an imprudent bargain or rewrite clear language.

An express right to terminate for convenience, stated to operate notwithstanding contrary provisions and without liability, may coexist with a separate termination right for excusable delay. A general good-faith obligation concerning performance does not restrict that express termination right where termination is neither a responsibility nor an obligation under the clause.

Contractual repayment provisions apply according to their terms. Unjust enrichment cannot undermine an agreed allocation of risk or recover benefits which the recipient was contractually entitled to receive.

Optimares designed and manufactured aircraft seats for Qatar Airways under four materially similar Purchase Agreements incorporating Standard Conditions. Qatar Airways terminated the agreements and purchase orders for convenience under clause 12.2.3 after Optimares invoked excusable delay arising from the Covid-19 pandemic.

Optimares claimed that the excusable-delay provisions displaced the convenience termination right, that termination was restricted by an express good-faith clause, and that it remained entitled to damages, wasted costs or restitution for intellectual property transferred under the contracts. Qatar Airways counterclaimed for repayment under clause 12.3.2.

The principal issues concerned contractual construction, the financial consequences of convenience termination, the interaction between termination and good faith, and whether the contractual transfer of intellectual property supported an unjust-enrichment claim.

1. Construction. The court applied the established principles in Arnold v Britton, Wood v Capita Insurance Services Limited, Rainy Sky SA v Kookmin Bank and Re Sigma Finance Corp. The agreements were negotiated by sophisticated commercial parties with professional assistance and were principally construed by textual analysis, while considering context and commercial consequences. The court would not rewrite the bargain because it operated harshly against Optimares.
2. Termination rights. Clause 12.2.3 created an express right to terminate for convenience notwithstanding anything contrary in the contractual documents. That right coexisted with clause 13.1.7, which provided a separate immediate cancellation right for qualifying excusable delay. The existence of excusable delay therefore did not prevent reliance on clause 12.2.3.
3. Financial consequences. Termination under clause 12.2.3 did not generate common-law loss-of-bargain or reliance damages. Clause 12.3.2 applied to convenience termination and required repayment of sums previously paid, together with relevant freight charges. Paid purchase prices for completed and delivered products were excluded, but non-recurring-cost payments relating to unfinished design work were repayable.
4. Good faith. Clause 16.13 required good faith in performing responsibilities and obligations. Exercising the express convenience termination right was neither. The clause therefore did not qualify or fetter clause 12.2.3. The court also found that the termination was not made in bad faith.
5. Unjust enrichment and intellectual property. The contractual provisions vested Foreground IP in Qatar Airways upon creation, without additional payment, and those rights survived termination. Applying Dargamo Holdings Ltd v Azitio Holdings Limited, restitution could not undermine that contractual allocation. The unjust-enrichment claim consequently failed.
6. Disposition. Optimares’ claim was dismissed. Qatar Airways’ counterclaim succeeded only for repayment of the non-recurring costs for the new seat design, with interest at the agreed US prime rate. Other counterclaim items failed.