EE Limited v Avanti Broadband Limited

On an application for an interim injunction requiring continued contractual performance, the court should not determine the applicable merits threshold solely by labelling the injunction prohibitory or mandatory. The court should examine the practical consequences of granting or withholding relief. Where the dispute turns on a short point of contractual construction, the usual American Cyanamid question—whether there is a serious issue to be tried—may be appropriate.

Under a framework agreement providing that a binding contract arises only when an order is accepted, an engagement form or statement of work does not, without more, create an indefinite obligation to supply. Clear wording in the framework agreement retains precedence over inconsistent provisions. Where the asserted construction is plainly wrong, the injunction must be dismissed without reaching damages or the balance of convenience.

EE sought an interim injunction requiring Avanti to continue providing satellite mobile backhaul services pending trial or further order. The services supported mobile coverage at remote sites, including sites relevant to emergency-service communications.

EE contended that the parties’ General Supply of Goods and/or Services Agreement, Statement of Work and purchase orders created an ongoing obligation to supply, including after the agreed pricing period ended. Avanti contended that the framework agreement required an accepted purchase order for each binding supply contract and that no indefinite obligation existed.

The central issues were the applicable merits threshold for the injunction and the construction of the contractual documents.

1. Applicable threshold. The application was not decided by mechanically categorising the injunction as mandatory or prohibitory. The relevant approach was to examine the practical consequences of granting or withholding relief. Because the dispute concerned a relatively short issue of contractual construction, and not significantly disputed facts, the usual serious-issue-to-be-tried threshold was applied.
2. Contractual framework. Clause 2.3 of the GSA stated in clear terms that no binding contract for services arose until Avanti accepted an Order, by written confirmation or delivery. That requirement was substantive and was not merely a matter of contract administration. The SOW was an Engagement Form contemplated by the GSA and formed part of an accepted Order; it did not itself impose an indefinite obligation to supply.
3. Duration and pricing. References in the SOW to mandatory performance, the Agreement and the Term described the services and pricing applicable when services were supplied. The Term was aligned with the agreed pricing period of 7.5 years. An indefinite obligation coupled with a court-determined reasonable charge would be commercially unworkable and conflicted with Clause 2.3 and the GSA’s order-of-precedence provision.
4. Fallback arguments. PO1 was limited to 4.5 years and could not operate as a continuing trigger for later supplies. Clause 1.4 did not make Avanti bound to accept any Order at any price or on any terms. The factual matrix, the parties’ wider contractual context, CCN5, migration issues and alleged “evergreen” practice did not displace Clause 2.3.
5. EE’s asserted construction was plainly wrong and therefore did not raise a serious issue to be tried. Questions of damages and the balance of convenience did not arise. The application for an injunction was dismissed.