Triple Point Technology (TPT), a Delaware based company, designed and implemented software for commodities trading. In 2012, TPT contracted with PTT, a commodities trading company, to provide the latter with a software system. Under the contract, the project was to be completed in two phases. In phase 1, the existing system would be replaced while in phase two the software would be further developed to accommodate new types of trade. A series of milestones were set up under the contract with payment according to those milestones.
Dispute arose between the parties when TPT failed to complete its services according to the contractual timetable. It completed Stages 1 and 2 of Phase 1 on 19 March 2014 but was 149 days late in doing so. Although PTT duly paid sums in relation to the completion of those stages, it refused to make further payments on the basis that the other milestones had not been met. TPT maintained that further payments were due on its invoices and was not willing to continue working without further payment. As a result, PTT alleged that TPT wrongfully suspended its work and eventually terminated the contract. TPT sued in respect of its invoices, and PTT counter-claimed damages, including liquidated damages for delay under Article 5.3.
At first instance, Jefford J dismissed TPT’s claim and awarded $4.5 million to PTT on the counter-claim. She found that TPT was not entitled to further payment from PTT as payment was governed by milestones set out in the contract and those milestones had not been reached. As for the counter-claim, she held that PTT was entitled to recover for the costs of procuring an alternative system and wasted costs. This was subject to a contract price cap under Article 12.3 of around USD 1 million. In addition to that sum, however, she also held that PTT was entitled to liquidated damages under Article 5.3 in the sum of nearly $3.5 million and that this was not subject to the cap.
The Court of Appeal allowed TPT’s appeal that liquidated damages under Article 5.3 were not recoverable for incomplete works. It also allowed the appeal on ground (2) that the cap should have applied to liquidated damages. It was held that the total liability of TPT could not exceed the contract price.
Quentin Cregan was instructed with James Howells QC. The matter is ongoing.
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