CL-2024-000308 - [2025] EWHC 1332 (Comm)

The parties assumed when they entered into the Framework Agreement that it would continue until CY20, which is why they agreed indexation weightings until then.

Those indexation weightings were based on the different types of expenditure incurred by Airwave (or their predecessors): labour costs, site and asset-related costs, and other costs

It can be seen those weightings differ from year to year, with CY20 being something of an outlier in relation to the low percentage applied to Element C.

It can be assumed, given Sch 8 Paragraph 26.1, that the weightings were intended to reflect in some way the actual costs of Airwave or their predecessors.

When the parties agreed CCN 187 in December 2018, they recognised that the Framework Agreement would not end in 2020 but they did not think through the effect on the weightings. There is no reason why they should have wanted the weightings for CY 20, which is something of an outlier in the percentages for each of the three Elements, to continue for every subsequent year and it would be illogical for it to do so.

There is nothing in the Framework Agreement or in CCR 187 which suggests they did have in mind that the indexation weightings for CY20 should be used for subsequent years.

The intention of the parties must therefore have been to reflect what the parties originally agreed, namely a breakdown of Airwave’s costs in accordance with Element A Element B and Element C.

There are logically two alternative ways of doing this. SoS’ primary case was that the indexation should be based on Airwave’s actual costs in the years after CY20, as that would reflect what the parties had agreed in the Framework Agreement.

Alternatively, it would be appropriate to average the Indexation Weightings, either as between CY1 and CY20 or between CY1 and CY19.