Nordic Power Partners P/S & Ors v Rio Alto Energia, Empreendimentos e Participações Ltda & Ors

On an application for summary judgment, the court may decide a short point of law or contractual construction where the evidence is sufficient and the parties have had a fair opportunity to address it. A defence must have a realistic, rather than fanciful, prospect of success. Loans remain part of a contractual investment calculation until actually repaid, even if enforcement proceedings have been issued. Equitable set-off requires manifest injustice. The exceptional unclean-hands defence requires serious immoral and deliberate or dishonest misconduct with an immediate and necessary relation to the equity sought. Specific performance is not refused merely because the defendant disputes its practical power to procure payment.

The Danish claimants sought summary judgment and/or strike-out against the first and second defendants concerning their entitlement under an English-law Cooperation Agreement governing the development and sale of Brazilian solar projects. The agreement, as amended, contained a Waterfall Mechanism under which the claimants were to receive their Actual Investment before any payment to the defendants. Following the sale of the projects, the defendants disputed the calculation and asserted possible set-off, unclean hands and lack of power to control distribution. The defendants served no evidence in response and did not attend the hearing. The central questions were whether those matters disclosed a realistic defence and whether there was any compelling reason for a trial.

1. Disposition. Summary judgment was granted against the first and second defendants. The claimants were entitled to declaratory relief and specific performance giving effect to their contractual entitlement to 100% of the Sale Proceeds. The strike-out application was unnecessary. Costs were reserved.
2. Summary judgment. The court applied the established test under CPR 24.3. It considered whether the defence had a realistic, rather than fanciful, prospect of success and whether any other compelling reason required a trial. The court could decide a short point of law or construction where it had the necessary evidence and the parties had an adequate opportunity to argue it. The defendants’ failure to serve evidence, despite ample opportunity, supported the conclusion that there was no arguable defence.
3. Actual Investment. The contractual definition included loans and Interest. Loans did not cease to count merely because enforcement proceedings had been brought. No double recovery had occurred, and the proposed implied term was neither necessary nor obvious and contradicted the express wording. The January 2023 Disbursement was not excluded merely because it was alleged to have been necessitated by the claimants’ breach. Any resulting damages claim remained available. Interest accrued at 14.59% per annum plus IPCA, compounded quarterly, and the claimants’ calculation was consistent with that formula.
4. Defences. A possible unpleaded counterclaim could not operate as set-off. An unliquidated claim required equitable set-off, available only where enforcement would be manifestly unjust. The alleged conduct did not meet the exceptional standard for unclean hands and had no immediate and necessary relation to the relief sought. The lack-of-power objection was unpersuasive because the defendants had sought to prevent distribution and could enable payment by withdrawing objections or giving instructions.
5. The court therefore concluded that the defendants had no real prospect of successfully defending the claim and that no compelling reason justified a trial.

First-instance decision. The judgment records earlier interlocutory injunction orders and a related arbitration, but no appeal from a prior judgment.