Advanced Multi-Technology for Medical Industry & Ors v Uniserve Limited

Where a party elects to keep a repudiated contract alive, it must continue to perform its own contractual obligations; affirmation does not create an intermediate option to suspend performance. In a non-severable instalment supply contract, a seller must maintain the cumulative quantity due where the buyer’s time for collection is not of the essence. If the seller’s delivery time is of the essence, failure to do so may justify termination. A seller cannot recover damages for non-acceptance of goods it never had available by recycling the same goods between instalments. A judge may decide an unargued point only after giving the parties a fair opportunity to address it. For misrepresentation, inducement requires a real and substantial part in entering the contract, and any evidential inference of inducement remains rebuttable.

Hitex contracted to supply 80 million face masks to Uniserve under a revised delivery schedule. A related Commission Contract provided for payments to Caramel Sales Ltd and David Popeck on shipments under the supply contract.

At first instance, the Deputy High Court Judge held that Uniserve had wrongfully repudiated the supply contract and that Hitex had accepted the repudiation, awarding Hitex US$16.94 million. The judge dismissed the commission claim. The decision is reported at [2024] EWHC 1725 (Ch).

Uniserve appealed the supply-contract award, while Caramel and Mr Popeck appealed on commission. The central issues were misrepresentation, termination for delivery failures, damages for non-acceptance under the Sale of Goods Act 1979, and the effect of termination on commission.

Lord Justice Males gave the leading judgment. Lord Justice Phillips and Lord Justice Snowden agreed.

1. Procedural fairness. A judge must decide the issues identified by the parties. A judge may raise a point which the parties appear to have missed, but only after giving them a fair opportunity to address it by evidence or submissions. The trial judge decided the misrepresentation and repudiation issues on bases which had not been argued and, in one respect, contrary to an admission on the pleadings. The judgment could not be upheld on those bases. The principle was supported by Al-Medenni v Mars UK Ltd [2005] EWCA Civ 1041 and Satyam Enterprises Ltd v Burton [2021] EWCA Civ 287.
2. Misrepresentation. The representation need not be the sole reason for entering a contract, but must have played a real and substantial part in inducing it. The relevant counterfactual is a question of fact. A strong evidential inference may arise from a false material representation, particularly if fraudulent, but it remains rebuttable. Applying The C Challenger [2022] EWCA Civ 231, the judge was entitled to find that Uniserve relied on its own due diligence, which contradicted the Waller email, and did not rely on that email when contracting. The inference of inducement was therefore rebutted and rescission failed.
3. Termination. Under The Simona [1989] 1 AC 788, a wrongful repudiation gives the innocent party only the choice of accepting termination or affirming the contract. Hitex did not communicate acceptance of Uniserve’s repudiation, so the contract remained alive and Hitex remained bound to maintain the cumulative quantities due. Its stock had to be reduced by the 15% reserved for the Jordanian government. It was in breach on 21 June and 5 July 2020, when delivery time was of the essence. Uniserve was therefore entitled to terminate on 11 July 2020. The court left undecided whether notice of readiness was required under this ex works contract, observing that the question depended on the contract and all the circumstances.
4. Damages. If the contract had remained alive, Hitex could not recover damages for non-acceptance of 77 million masks when it never had that cumulative quantity available. The contract was not severable, and the same masks could not be recycled or retendered for successive instalments. Stopping manufacture was not mitigation of future breaches. An estoppel case raised for the first time on appeal, and a separate claim concerning two June shipments not advanced below, were too late.
5. Disposition. The supply-contract appeal was allowed and Hitex’s damages claim was dismissed. Because Uniserve was entitled to terminate the supply contract, no further commission could be payable on uncompleted shipments and the commission appeal was dismissed.

• Court of Appeal (Civil Division): In [2025] EWCA Civ 1212, the supply-contract appeal was allowed, Hitex’s damages claim was dismissed, and the commission appeal was dismissed.
• High Court of Justice, Business and Property Courts: In [2024] EWHC 1725 (Ch), the Deputy High Court Judge awarded Hitex US$16.94 million on the supply contract and dismissed the commission claim.