HT-2021-000363 - [2025] EWHC 532 (TCC)

IBM’s case is that by notice dated 24 February 2021, it terminated the ICA and associated Agreements on grounds that: (a) Winsopia refused to comply with its audit obligations in response to IBM’s request under the ICA; and (b) Winsopia was in breach of clause 4.1 of the ICA. Further or alternatively, the breaches of the ICA were repudiatory and/or by means of such breaches Winsopia evinced an intention not to be bound by the Agreements and thereby renunciated the same. If the notice dated 24 February 2021 were ineffective to terminate the Agreements, IBM would rely on contractual or common law termination by service of its pleaded case.

The defendants’ case is that the letter dated 24 February 2021 was an invalid letter of termination on the grounds that: (a) the audit request was not made on reasonable notice and failed to offer a reasonable period for Winsopia to respond; (b) the audit request was not made in good faith but was intended to elicit information about LzLabs for purposes extraneous to the ICA and/or for the collateral purpose of supplying such information to IBM Corp; and (c) no confidentiality undertakings were offered by IBM. Accordingly, the letter amounted to repudiation of the ICA and other Agreements, which Winsopia accepted by its letters dated 29 July 2024.