CL-2023-000396 - [2025] EWHC 1904 (Comm)

It is with these principles in mind that I turn, first, to the ‘Services Claim’.

I have concluded that this is a claim which ought not to be struck out notwithstanding Munich Re’s position that there is no relevant liability since, when the parties wished to extend the Collaboration Agreement until 30 September 2016, they concluded an express written agreement to do so (the Extension Agreement), and so they should be taken as not having intended that Munich Re would have to pay thereafter.

I say this for a number of reasons. However, in short and having regard to the appropriate approach to be adopted on applications such as the present, in my view, the ‘real prospect of success’ test is satisfied in relation to the ‘Services Claim’ in that it is not possible to say with confidence that the factual basis for the claim is fanciful because it is entirely without substance or that FTL does not have material to support at least a prima facie case that the allegations are correct or that FTL has pleaded insufficient facts in support of their case to entitle the court to draw the necessary inferences.

First, although issue has been taken on Munich Re’s behalf by Mr Taylor, Munich Re’s solicitor, with the list of services relied upon by FTL (as set out in the third witness statement of Mr Frangeskides, FTL’s solicitor), that is not a dispute which it is appropriate to determine on an application such as the present since to do so would involve a mini-trial. This is not a case where FTL’s contentions are self-evidently unsupportable. In particular, it is not the case, notwithstanding what is suggested on Munich Re’s behalf (through Mr Taylor), that there is no evidence that any of the services referred to were requested by Munich Re. There is at least a reasonable prospect that FTL will be able to establish at trial that the services it provided were requested by Munich Re and that they extended beyond the services in relation to BAE Systems and Bosch in respect of which Munich Re has paid US$46,800.

Secondly, although Mr Swainston submitted that the ‘Services Claim’ is inconsistent with Clause 12.3 of the Collaboration Agreement, it seems to me - again - that it is at least arguable (and I am inclined to think rather than merely arguable) that Clause 12.3 has nothing to do with the ‘Services Claim’.

Clause 12.3 provides as follows:

“Any additional agreements, changes or additions to this agreement shall not be valid unless made in writing. Any waiver of this formal requirement must also be in writing to be valid. An electronic signature shall not constitute a replacement for the written form.”

The argument that Clause 12.3 is confined to the continued existence of the contract and does not include within its scope the entry into a new contract by informal means might well prove to be right, especially given that there are other provisions in the Collaboration Agreement, which expressly state that they are to apply after termination. Thus, by way of example, Clauses 8.6 and 8.7 say this:

“8.6

In case of a termination of this agreement, Munich Re shall pay FTL for all previously unpaid but earned fees or, as the case may be, FTL shall repay Munich Re for all previously paid but unearned fees for Services rendered up to the date the termination takes effect. For the purpose of this clause and repayment, all fees shall be deemed earned on a pro rata basis.

8.7

Upon termination, each Party undertakes to cooperate with the other Party to ensure that the relationship is terminated in an orderly manner.”

Moreover, Clause 12.2 is in these terms:

“Neither Party shall, even after termination of the contract, cite the other Party as a client for reference purposes or otherwise name the other Party in the context of publications or promotional measures without the latter's prior written consent, such consent being revocable at any time. The same shall apply to the use of the other Party's logo.”

If Clause 12.3, the very next clause, had been intended to apply after the expiry or termination of the Collaboration Agreement, this could very easily have been stated as was done in Clause 12.2 (and Clauses 8.6 and 8.7).

I consider it also to be arguable that the reference in Clause 12.3 to “any additional agreements, changes or additions to this agreement” indicates that what is intended to be caught by Clause 12.3 is confined to the situation where the Collaboration Agreement continues in existence since the wording presupposes just this – and not the situation where the Collaboration Agreement has come to an end. If that is right, and I consider it arguable that it is, then, because the effect of Clause 8.1 of the Extension Agreement is that the previous Collaboration Agreement expired on 30 September 2016, it would follow that Clause 12.3 has no application to any matter after 30 September 2016. As such, there would be no need for any implied contract to be made in writing.

Thirdly, whilst Mr Swainston submitted that there was no suggestion or expectation that FTL would continue to receive the same quarterly fee under any new agreement or that other terms would be the same, taking issue with Mr Frangeskides’ contention in his third witness statement that “There was no suggestion or expectation during this period that FTL would be providing those services free of charge ... FTL was accordingly entitled to payment for those services, at the rate specified under the Collaboration Agreement, i.e. US$750,000 per quarter as pro-rated and an implied contract arose between the parties to that effect”, this, again, is not sufficiently free from doubt as to justify an order striking out the ‘Services Claim’.

As Mr Blackwood noted and as made clear by Hamblen J (as he then was) in Brown v InnovatorOne plc [2012] EWHC 1321 (Comm) at [1014]-[1016], when considering whether an implied contract arises, the central question is whether the conduct of the parties is consistent only with an implied contract. In a summary judgment application context, the question is whether FTL has a realistic prospect of establishing that an implied contract arose on the same terms as the Collaboration Agreement after 30 September 2016 and in that regard the existence of conduct that might appear inconsistent is not determinative against FTL’s contention: see, by way of example and in a different (implied retainer) context Naibu Global International Co. Plc. v Daniel Stewart & Co Plc [2020] EWHC 2719 (Ch), [2021] PNLR 4 at [30] per Bacon J. In my view, taking into account the totality of the evidence currently before the Court, there is such a realistic prospect.

As to this, Mr Swainston pointed to an email from Mr Wettemann to FTL on 7 October 2016 proposing a reduced fee of US$250,000 per quarter (and various other significant amendments), observing that this was a proposal which was not agreed. He submitted that, accordingly, it is not correct for FTL to contend, as Mr Frangeskides does in his third witness statement, that “No agreement was reached to reduce the quarterly rate, but there was no suggestion that the Collaboration Agreement would not continue”. Mr Swainston submitted that Munich Re had clearly indicated in this email that the terms in the Collaboration Agreement would not continue and no alternative terms were agreed. The contemporaneous correspondence (as well as later correspondence such as a letter from Mr Jerry Flaxman of FTL to Mr Andre Knoerchen dated 16 April 2018), he submitted, clearly indicates that both parties recognised that no agreement had been reached either to continue the Collaboration Agreement or to constitute some kind of joint venture or partnership. FTL’s contemporaneous position was not that the parties had reached any agreement but instead that FTL had provided work to Munich Re “out of the good faith anticipation that we would reach an agreement” (as it was put in FTL’s email which Dr Giarrusso sent to Mr Wettemann on 4 May 2017, to which I come on to refer).

I agree with Mr Blackwood, however, that it is arguable that, whilst a replacement Collaboration Agreement was being negotiated, the parties conducted themselves on the basis that the terms of the expired Collaboration Agreement nonetheless continued to apply to their work. Munich Re, after all, continued to request, and FTL continued to provide, services that fell within the scope of the Services in the expired Collaboration Agreement, without any apparent change in process or substance notwithstanding the fact that the Collaboration Agreement had expired. These were valuable services, which, on the face of it, FTL would have been unlikely to have been prepared to provide for free, given that they had previously been providing the same services for US$750,000 a quarter.

Furthermore, in the 7 October 2016 email Mr Wettemann stated that “Although our CV has already expired on paper, there is no need for any rush from our perspective”. There is some force in Mr Blackwood’s submission that this is consistent with Munich Re continuing to request services after 30 September 2016 and treating itself as being required to pay for them at the rate that had prevailed under the Collaboration Agreement. Mr Swainston took issue with this, noting that in the first paragraph of the email Mr Wettemann referred to certain “sad news” concerning the health of somebody apparently close to Dr Giarrusso, suggesting that this explains the reference to there being “no rush”. Whether Mr Swainston is right about this is, however, impossible to determine at this juncture: it might prove to be the case that he is right but it might also, however, prove to be the case that he is wrong. As Mr Blackwood put it, if Munich Re’s stance had been that FTL was not going to be paid for the services which it was providing, it might be thought that there would be something of a “rush” to clear any confusion up and resolve the matter. It is, for this reason, feasible that Munich Re’s reassurance is explained by the parties considering that the terms of an implied Collaboration Agreement applied. Whether that was, in fact, the case can only realistically be decided after a trial.

Fourthly, as to the quantum meruit aspect of the ‘Services Claim’, Mr Swainston observed that, whilst it was open to FTL (as an experienced commercial party) to seek an agreement in relation to payment for any modest services requested after 30 September 2016, it chose not to do that - apparently in the hope that a further agreement would be concluded. He noted, furthermore, that there was precedent for FTL providing services at its own cost in order to build and encourage a relationship with Munich Re, with the CIP/FTL Partnership Document referring in 2015 to the fact that “Over the past year, FTL has already provided support to CIP … and has done so for no compensation in the spirit of building a long-term relationship with CIP”. There is, in such circumstances, Mr Swainston suggested, no injustice which would justify a quantum meruit entitlement, FTL having produced no evidence to demonstrate “free acceptance” of benefits on any shared basis that payment would follow.

In this respect, Mr Swainston cited H&P Advisory Limited v Barrick Gold (Holdings) Limited [2025] EWHC 562 (Ch), in which Mr Simon Gleeson (sitting as a Deputy High Court Judge) said this at [208]:

“… Lord Burrows is clearly correct that the idea that mere receipt of a benefit creates a restitutionary liability unless there is a positive act of rejection by the recipient in advance of or during the receipt, is incompatible with English law.”

He went on at [209] to add:

“You cannot begin by assuming the expectation of payment. Services may be supplied in the expectation of payment, or merely in the hope of payment, but there must be some ground for this hope or expectation – it cannot be conjured out of nothing.”

He continued at [211]:

“… freedom of contract necessarily implies the freedom not to contract. If a man decides not to contract with another, that other cannot, by unilaterally acting so as to confer a benefit on him, require him to pay for that benefit.”

At [213] he said this:

“The third ground is that the action with which we are involved here is an action in restitutionary quantum meruit. As Birks points out, the action in quantum meruit is a development of the old action of assumpsit, which is based on a non-contractual promise to pay (Birks, Unjust Enrichment, 2nd Ed. at p. 288). The essence of quantum meruit is that where a person has induced another to confer a benefit on him through a non-contractual promise, and that non-contractual promise is not fulfilled, the courts may provide a remedy. It would be strange if that requirement for a non-contractual promise had evaporated completely.”

Mr Swainston suggested that this echoes the approach adopted in Benedetti v Sawiris [2013] UKSC 50, [2014] AC 938 at [9]-[10] and [17] per Lord Clarke and [99]-[100] per Lord Reed, as well as AMP Advisory & Management Partners A.G. v Force India Formula One Team Limited (in liquidation) [2019] EWHC 2426 (Comm) at [195]-[202] per Moulder J, specifically at [195] where the point was made that an obligation to pay will “Undoubtedly … be imposed only if justice requires it or, which comes to much the same thing, if it would be unconscionable for the plaintiff not to be recompensed”.

Mr Swainston also cited Moorgate Capital (Corporate Finance) v H.I.G. European Capital Partners LLP [2019] EWHC 1421, at [87]-[102] per HHJ Keyser KC and in particular the observations: at [88] that “a convenient starting point, all too easily overlooked, is to remember that there was no contract for payment” and that “proper justification is required for conferring an entitlement to payment on a party who has not contracted to receive payment” since “It is not the role of the law of unjust enrichment to create for the parties contracts that they never made”; at [90] that the authorities do not establish any “general right to payment for requested services in the absence of a contract”; at [92] that it is not enough that the claimant had a non-gratuitous intent since the defendant must also have known of that intent; and at [98] that “the courts ought not to be quick to suppose that commercial parties who are well able to make contracts with each other expect payment to be made in the absence of a contract”.

In the present case, Mr Swainston submitted, there was no promise to pay, and FTL has not alleged (still less, proven) a shared expectation that it would be paid for services provided after expiration of the Collaboration Agreement or any indication from Munich Re that payment would be made if contractual negotiations failed. As before, however, although it may be that at trial these submissions will prevail, I consider it impossible at this stage to be sufficiently confident that this will be the case as to mean that there should be the strike-out that Munich Re seeks. On the contrary, it seems to me at least arguable that neither party would have contemplated it as realistic to proceed on the basis that, there being no contract in existence, FTL was providing valuable services for no apparent consideration. These were services which were being provided at Munich Re’s request in a context where FTL had been providing similar services (and being paid for those services) for a period of some 16 months previously. Nor can it really be said that FTL was taking the risk of not being paid unless a contract was concluded given that, in Mr Wettemann’s e-mail on 19 May 2017, what was proposed by Munich Re was that Munich Re would “consider FTL’s reasonable fees and expenses for the services requested by us and provided by FTL after 30 September 2016”.

It follows that I decline to strike out the ‘Services Claim’.