Kyndryl UK Limited v Jaguar Land Rover Limited

On an application for strike-out or summary judgment, the court must distinguish a claim that is legally bound to fail from one requiring factual investigation at trial. Summary judgment may determine a severable part of a claim or a decisive point of law, but not an isolated issue whose determination has no consequence beyond reducing the issues for trial.

Contractual wording may permit assignment within a corporate group or to a successor acquiring a business where that is the better construction of the clause as a whole. An agreement to undertake a contractually required formal variation is analytically distinct from an informal variation, and its enforceability may require trial. However, a term requiring a customer to accept a variation will not be implied where the contract remains fully effective without it. Pleading defects should ordinarily be cured by amendment or further information where appropriate.

Kyndryl, assignee of IBM’s managed IT infrastructure business, brought claims against JLR arising from long-term data-centre and hosting arrangements. It claimed payment or restitution for additional services provided after an intended migration to a shared environment did not occur, and for additional work connected with a storage solution.

JLR sought summary judgment and strike-out on five grounds: invalid assignment, unenforceability or uncertainty of a variation agreement, failure of contractual and estoppel cases, failure of the unjust-enrichment pleading, and limitation. Kyndryl cross-applied to amend its Particulars of Claim. The central questions were whether the claims were bound to fail or had no real prospect of success, and whether any defects could properly be resolved without a trial.

1. Procedural threshold. Under Civil Procedure Rules 1998, r 3.4(2), strike-out was inappropriate unless the claim was certain to fail. Under r 24.2, summary judgment required no realistic prospect of success and no compelling reason for trial. The court must not conduct a mini-trial, must consider reasonably expected trial evidence, and may decide a short point of law or construction where the necessary evidence and argument are before it. Summary judgment on an issue concerns a severable part or component of a claim, not an isolated issue with no consequence beyond leaving one fewer issue for trial.
2. Assignment. Kyndryl had a real prospect of proving that the SPA schedule identified the DCHA. Claims under the pleaded variation agreement and restitutionary claims were capable of being claims or rights arising exclusively from IBM’s ownership of the DCHA. The assignment prohibition in clause 1.11.7 did not avoid the assignment for want of JLR’s consent. “Assign, or otherwise transfer” treated assignment as a form of transfer; “legal entity of which either party is a part” could refer to the IBM group, and Kyndryl was capable of being a successor organisation by acquiring IBM’s GTS business. The interpretation was reached from the clause as a whole and its commercial context.
3. Variation agreement. The alleged agreement was not certain to fail. The effective date, charges, services and differences between schedules raised factual and evidential questions. A contract may be binding although further terms remain to be agreed if the court can make the agreement workable, including by implying a reasonable term where appropriate. The contractual change-control provisions did not conclusively answer the case. The court left open whether an informal agreement to undertake the prescribed formal steps could be enforced consistently with Rock Advertising Ltd v MWB Business Exchange Centres Ltd.
4. Implied contractual term. The claim that the DCHA contained an express or implied term requiring JLR to accept a variation was dismissed. The existing contract was efficacious without that term. IBM could refuse additional services or propose a formal change, and JLR retained a choice whether to accept or reject a CCN. The change-control dispute procedure could not impose contractual obligations to which the parties had not agreed.
5. Estoppel and restitution. The estoppel case was permitted to proceed because it relied on the same facts as the viable variation-agreement case and summary determination would have no practical consequence. The free-acceptance unjust-enrichment claim was not dismissed. Kyndryl was permitted to plead requests for additional services, subject to JLR’s entitlement to seek further information.
6. Disposition. Summary judgment was granted only on the alleged express or implied DCHA term requiring a variation and that claim was dismissed. In all other respects JLR’s application failed. Kyndryl was permitted to amend paragraphs 42A, 42B, 69A and 69B.