Cityfibre Limited v GCI Network Solutions Limited

Contractual wording recording that a customer intends to implement a migration project is declaratory. It identifies the general nature of the project, rather than confining it to a particular plan or method known when the agreement was made.

“Migrating” End User Connections may include moving customers from the provider’s network to a new network operated by the customer or a third party. The connections are identified as the objects of migration; they need not remain within the contractual definition after the migration.

A contractual right to require access to a location to end is not excluded by a separate obligation to co-operate and mitigate the effects of a migration project. However, that obligation may require more than the contractual minimum notice period where the circumstances make the minimum period inadequate.

CityFibre and GCI were parties to a Network Access and Maintenance Agreement, as amended and novated when GCI acquired part of KCOM’s business. GCI was developing an IP Core Network Project involving reduced use of CityFibre’s metropolitan networks, the vacation of locations and the migration of customer connectivity to a new network using third-party Ethernet.

The parties agreed that the project reduced MAN Connections and involved vacating related Locations. The issues were whether it was a “Proposed Migration Project” under clause 5.20 and whether clause 5.20 prevented GCI exercising its rights under clauses 14.7 and 14.8 to terminate access to individual Locations and require removal of CityFibre equipment.

1. Construction of intention. The words “the Customer intends to” in clause 5.20.1 were declaratory. They recorded GCI’s general future intention to implement a project of the kind described. They did not require the court to determine GCI’s subjective intention or limit the clause to a particular project fixed at the date of the Novation Agreement.
2. Meaning of migration. In context, “migrate” bore its ordinary computing and IT meaning of changing, moving or transferring information, software or hardware from one system or environment to another. Clause 5.20.1.1 identified the End User Connections to be migrated but did not prescribe the destination or method. Clause 5.20.1.2 expressly contemplated connectivity being provided by CityFibre, another provider or GCI itself. The fact that a connection ceased to satisfy the contractual definition after being moved did not prevent it from having been migrated.
3. The reference in clause 5.20.5 to Schedule 5 reinforced that termination of Connections could occur in connection with the Proposed Migration Project. The clause therefore covered projects involving changes to, or termination of, Connections.
4. The IP Core Network Project fell within clause 5.20. It involved changing the way customers received connectivity, reducing MAN Connections and vacating related Locations. CityFibre could recover costs reasonably and properly incurred directly in connection with implementing the project, subject to the contractual mitigation requirements.
5. Interaction with clauses 14.7 and 14.8. Clause 5.20 did not remove GCI’s power under clause 14.7 to require CityFibre to vacate a Location. Clause 5.20.3 nevertheless required GCI to engage and co-operate constructively and in good faith, using reasonable endeavours to mitigate the project’s impact. Depending on the facts, that obligation could require more than six months’ notice, particularly where safe removal within six months was impracticable or simultaneous notices created significant logistical difficulty.
6. The answers to the two liability issues were respectively yes and no. GCI’s rights under clauses 14.7 and 14.8 were not precluded, but remained subject to clause 5.20.3.

• The claim was commenced under CPR Part 8. Mr Justice Robin Knowles directed that it continue under CPR Part 7 because the parties disputed the relevant factual matrix, and ordered a trial of two liability issues.
• High Court (Commercial Court): Calver J answered the first issue yes and the second no, subject to the qualification that clause 14.7 remained subject to clause 5.20.3.