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ARTICLE · 15 FEBRUARY 2018

No Damages 4u

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Termination of mobile phone distribution agreement for insolvency (rather than repudiatory breach) prevents claim for future loss of bargain

United KingdomInsolvency/Bankruptcy/Re-Structuring
Huw Jenkin
Huw Jenkin
John Lee
John Lee
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Termination of mobile phone distribution agreement for insolvency (rather than repudiatory breach) prevents claim for future loss of bargain

In Phones 4u Ltd (In Administration) v EE Ltd (2018), the High Court struck out EE's claim for £200 million in damages because of the wording of a letter terminating its distribution arrangements with Phones 4u. The letter was effective in terminating the relevant contract only in exercise of EE's right under a contractual provision allowing termination for insolvency - and not for alleged repudiatory breach by Phones 4u under common law. As a result, EE had no claim for future loss of bargain.

Background

Prior to its entry into administration in September 2014, Phones 4u was a well-known distributor of mobile phone contracts from mobile network operators to end users and EE was and remains one of the major mobile network operators in the UK.

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