On Monday, the Court of Appeal handed down judgment in Kawaskai Kisen Kaisha Ltd v. James Kemball Limited  EWCA Civ 33.
The Claimant (“JKL”) is a road haulier. Pursuant to a contract with the First Defendant (“K-Euro”) it performed the UK road haulage operations for containers carried on the liner service provided by K-Euro’s parent company, the Second Defendant (“KKK”). The contract required K-Euro to provide JKL with a specified minimum number of jobs. When KKK merged its container liner operations with those of two other carriers, KKK’s own liner service was wound down. As a result, K-Euro no longer had KKK container jobs to give to JKL. JKL sued both K-Euro and KKK. KKK challenged jurisdiction.
The principal issue on the jurisdiction challenge was whether there was a claim against KKK that had a real prospect of success. Specifically, for the purposes of the appeal, it was accepted that (there was a real prospect of establishing that) KKK’s actions had caused K-Euro to breach its contract with JKL and that KKK had known this. The issue was whether those actions, and that knowledge, could support a claim for inducing breach of contract.
At first instance, the judge held that the claim did have a real prospect of success. The Court of Appeal disagreed. It held that it was not enough for a claim to be arguable: it had to carry some degree of conviction and be supported by evidence. In this case, KKK’s actions had “prevented” performance by K-Euro, but KKK had not “induced” the breach. Nor did KKK have the requisite intention. The Court also held that “inconsistent dealings” did not provide a basis for liability that was distinct from the principles articulated in OBG v. Allan. Passages in earlier authorities that suggested that “inconsistent dealings” could provide a distinct basis for establishing liability did not survive OBG v. Allan.
A copy of the Judgment can be found here.