High Court refuses to grant a mandatory injunction compelling an unwilling supplier to recommence its supply of goods and services under a disputed contract.
In Vibrant Doors Ltd v Rohen UK Ltd [Unreported] (15/03/2018), the claimant applied for a mandatory injunction requiring the defendant to continue making supplies for at least six months under the terms of a supply of goods and services agreement, the nature and existence of which was in dispute.
The defendant, a retailer, had been making supplies to the claimant, a door company, for several years under an informal arrangement. When the defendant ceased to make such supplies, a dispute arose in which the claimant suggested that the defendant’s conduct amounted to an unlawful termination on insufficient notice of an agreement between the two parties. At issue in the dispute was whether there was indeed an ongoing supply contract between the parties, or whether the relationship was better characterised by a series of distinct contracts.
The claimant’s injunction application was made on the basis that the relief was necessary to prevent the loss which would result from the defendant’s sudden decision to end the arrangement. It submitted that damages would not be sufficient redress in light of the loss of profit, reputation and market share it faced, which would be difficult to quantify.
Rejecting the claimant’s application, the court focused on the practical effects of granting the requested injunction, which it determined was destined to be ineffective.
Granting the injunction in the circumstances would have required the court to set out the terms of a contract, the nature and existence of which was in dispute. The court considered that a constructive relationship between the parties would be necessary to make such an arrangement work, as it would not be completely clear if the parties were discharging their respective duties under the imposed contract. Given that the defendant would be unwilling to comply with the terms, and that the court assumed its enforcement of any mandatory injunction would be necessary, it held that the form of relief was not practical.
This decision highlights the emphasis which the courts put on considering the practical impact of a mandatory injunction. In particular, a court will think long and hard before granting an injunction to force unwilling parties to work together particularly when, as in this case, the terms of any contract are unclear.
Vibrant Doors Ltd v Rohen UK Ltd [Unreported] (15/03/2018)