CA-2024-002472 - [2025] EWCA Civ 1407

Genesis’s contract with its existing electricity supplier was due to expire on 1^st October 2017, after which it would be moved to much higher ‘deemed rates’ for the continuing supply of electricity to its estate. As a result there was an element of urgency in entering into the new contract. In the event the new contract with URE was concluded on 29^th September 2017. It was a detailed contract for the supply of electricity to Genesis’s housing estate, for a four year period from 1^st October 2017, in the negotiation of which both parties had specialist assistance: in URE’s case from its solicitors, Burges Salmon; and in Genesis’s case from a specialist broker, Fidelity Energy Ltd. The contract was drafted by Burges Salmon, based on a precedent which was suitably adapted to reflect the parties’ agreement.

The contract provided for payment of ‘Charges’ based on meter readings where available, and otherwise on the basis of estimates made by URE, with payments being made monthly in arrears. However, because URE was a start-up company without resources of its own and with no other customer, and because funding had not yet been obtained, it was agreed that initially URE would be paid quarterly and subsequently, from March 2018, monthly, in advance. It was common ground between the parties that there was such a collateral agreement, apparently not recorded in writing, and that it was to be temporary, but an issue was to arise as to how long it was intended to last.

The contract contained provisions requiring Genesis to allow reasonable access to read, install, remove, and replace meters, and permitted URE to replace existing meters with meters which could be read remotely.

It also included a term entitling URE (‘the Supplier’) to terminate the contract in certain events, including the passing of a resolution by Genesis for its amalgamation:

‘10.2 The Supplier may terminate this Contract at any time for all or any Supply Premises if: …

(d)

the Customer passes a resolution for its winding up which shall include amalgamation, reconstruction, reorganisation, administration, dissolution, liquidation, merger or consolidation (other than a solvent amalgamation, reorganisation, merger or consolidation approved in advance by the Supplier) or a petition is presented for, or a court of competent jurisdiction makes an order for, its winding up for dissolution, or an administration order is made in relation to it or a receiver is appointed over, or an encumbrance takes possession of or sells, one or more of its assets or the Customer makes an arrangement or composition with its creditors generally or ceases to carry on business; …’

This was one of nine grounds for termination set out in clause 10.2. Some of these grounds involved a breach of its obligations by Genesis, while others did not. One of the grounds for termination, in clause 10.2(b), was the commission of a ‘material breach’ of the contract by Genesis which, where capable of remedy, was not remedied within 10 days from the giving of a notice by URE requiring such remedy. Clause 10.2 entitled URE either to terminate the contract in its entirety if any of these termination events occurred or to limit the termination to specified ‘Supply Premises’, that is to say premises to which URE was supplying electricity.

The clause went on to provide for a payment to URE in the event of a termination pursuant to clause 10.2:

‘10.5 Where, in relation to any Supply Premises, this Contract is terminated by the Supplier pursuant to clause 10.2, the Customer shall within 10 days of the termination date pay to the Supplier the [sic.] 50 percent of the remaining value of this Contract to the Supplier in respect of the relevant Supply Premises (as determined by the Supplier acting reasonably) as notified by the Supplier.’

The contract also identified circumstances in which Genesis would be entitled to terminate the contract, but contained no provision for a termination payment in that event.

It also contained the following term:

‘13.1 No delay or omission by either party in exercising any right, power or remedy under this Contract shall be construed as a waiver of such right, power or remedy and any single or partial exercise shall not prevent any other or further exercise of the same or the exercise of any other right, power or remedy.’