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

Clause 1.12.2 provided that either party might terminate the ICA if the other did not comply with any of its terms, provided the one who was not complying was given written notice and reasonable time to comply.

As set out above, Winsopia failed to comply with IBM’s valid audit request and therefore was in breach of the ICA.

Further, clause 4.5.3 provided that IBM might terminate Winsopia’s licence if Winsopia failed to comply with the licence terms.

Notwithstanding any arguments as to the validity of the audit request, Winsopia was in breach of the ICA licence terms as set out in my findings on the technical breaches summarised in paragraphs [838] to [844] above.

Winsopia failed to respond to the requests for it to provide confirmation that: (i) no employee or agent of LzLabs had used the IBM Software; (ii) no employee or agent of LzLabs or any of its affiliates has been provided with any information discerned from operating or testing the IBM Software; and (iii) the IBM Software was not used in connection with the development of the SDM. In those circumstances, IBM had no obligation to allow Winsopia any further period to cure its breaches or resolve any dispute; the technical breaches were not capable of rectification.

In those circumstances, IBM was entitled to rely on Winsopia’s breach of clause 4.1 of the ICA as justification for termination of the same pursuant to clause 1.12.2 and/or termination of the Winsopia licence pursuant to clause 4.5.3.

Alternatively, IBM was entitled to treat the technical breaches as repudiatory and terminate the ICA and associated agreements at common law.

For the above reasons, I find that IBM validly terminated the ICA and/or Winsopia’s licence for the ICA Programs.