Can a party recover restitution of contractual pre-payments for failure of basis even if that failure stems from its own repudiatory breach? Can or should summary judgment be pursued where there is a potential set-off? These questions are addressed in the judgment of Rubikon Shipping Company DOO v Jetfly Hub SRL [2023] EWHC 2200 (Comm).
This oil and gas dispute centered around Rubikon making USD 3.8m of pre-payments for gasoline which ultimately was not delivered by Jetfly. There was a wider commercial dispute, with total claims of c. USD 5.5m and a counterclaim of up to USD 6.9m. These were all disputed contractual claims save for the Claimant’s claim for restitution of the USD 3.8m of pre-payments.
The Claimant applied for summary judgment on that unjust enrichment claim, alternatively summary judgment on all of the issues in that claim, save for the mechanical issue of setting off the extent of any successful counterclaim in the remaining contractual disputes.
The Defendant argued (inter alia) that (i) restitution for unjust enrichment was not available, or at least not on summary judgment, because the Claimant had caused the failure of the deal by its repudiatory breaches; (ii) the contract had been informally varied to exclude such a claim; (iii) summary judgment could not be granted on the claim due to a set-off defence; and (iv) summary judgment should not be granted on the issues because a trial would be required anyway on points including the alleged repudiatory breaches.
The Judge was satisfied that the law was clear on such claims for restitution and that the alleged variation did not preclude such a claim, so the Claimant’s claim would succeed subject only to the question of set-off. The Judge did not consider that the contract excluded set-off but was satisfied by the Claimant’s arguments that there should effectively be summary judgment on the claim, subject only to the mechanical process of set-off. He therefore gave summary judgment on all the issues in the claim save for the issue of set-off.
Interestingly, as part of his reasoning on the practical benefits of this order, the Judge directed that any appeal on the legal issue of the availability of restitution for contract-breakers should follow the trial of the remaining claims. Ultimately, the proceedings settled shortly after the summary judgment was entered and so the point went no further.
To read the full judgment, please click here.
Ben Waistell was instructed by Simona Peter and Harry Arnold of Bird & Bird for the Claimant.
