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McCain Foods (GB) Ltd v Eco-Tec (Europe) Ltd [2011] EWHC 66 (TCC) 27/1/11

Case Reference: McCain Foods (GB) Ltd v Eco-Tec (Europe) Ltd [2011] EWHC 66 (TCC) 27/1/11

The Facts

The Claimant (C) purchased a BGPur system (the System) from the Defendant (D) under an Equipment Purchase Agreement including a Specification.  The System was intended to remove Hydrogen Sulphide from biogas produced in C’s waste water treatment processes at one of its plants.  The clean biogas was intended to be used by C in the generation of electricity through a Combined Heat and Power plant to provide a source of power and electricity for the plant which C said entitled it as an Ofgem accredited generator of renewable electricity to obtain Renewables Obligation Certificates.  C alleged that the System proved impossible to commission successfully and it therefore treated D as being in repudiatory breach of contract and accepted that breach, or, rescinded the contract in consequence of which it sought recovery of monies paid under the contact and damages.  The claim was denied by D who counterclaimed for money outstanding under the contract.

The Issue

The court had to determine whether the System as designed and supplied was compliant with the specification and fit for its intended purpose and whether there was any breach of contract and/or misrepresentation if that was not the case.

Held

Mr Recorder Acton Davis QC

Although the claim was, in part, based upon alleged representations and/or the existence of a collateral contract, the dispute could be decided on the express terms of the contract alone.  As a matter of contractual interpretation the risk for the inability to commission the System was that of D.  It was impossible to commission the System and D was thus in breach of contract.  Even if that were not the case, taken as a whole various e-mails and telephone conversations amounted to certain assurances as to the capabilities of the System.  D could not rely upon the entire agreement clause in the contract to defeat the misrepresentation claim based upon those assurances.  Damages would be awarded for breach of contract.