Triple Point Technology, Inc v PTT Public Company Ltd

The Claimant, Triple Point Technology, Inc. (“TPT”), is a company incorporated in the State of Delaware. TPT’s business includes the design, development and implementation of software for use in commodities trading, based on its proprietary platforms (Commodity XL (or CXL) and Softmar Vessel Chartering and Vessel Operations (or VO)).

The Defendant, PTT Public Company Limited (“PTT”), is a public company incorporated in Thailand which undertakes such commodities trading.

In around 2012, PTT set about procuring a commodities trading, risk management and vessel chartering and operations system (a “CTRM” system) to replace its existing system (the TCS system) for commodities already traded by PTT, principally oil, refined products and petrochemicals. PTT also used standard SAP software in its business. PTT sought tenders for the design, development, supply and implementation of a new system on the basis of the Terms of Reference (referred to at trial as the “TOR”) which, amongst other things, set out PTT’s functional requirements for the system. PTT intended there to be two phases to the project: Phase I would replace the existing system and Phase II would involve the development of the system to accommodate new types of trade.

TPT responded by its bid dated 7 September 2012 which included its Technical Specification documents. I will refer to aspects of this bid in more detail in due course.

The bid and the Technical Specification were then the subject of clarifications. These resulted in a set of clarifications dated 14 December 2012 (which was subsequently incorporated into the contract).

A letter of intent was then generated and signed by TPT on 10 January 2013. This was also agreed to be the effective date of the contract subsequently entered into.

On 31 January 2013 TPT sent to PTT an Order Form (Order Form A) in respect of software licences and there were two subsequent Order Forms (referred to as B and C) also relevant to this dispute.

A Commodity Trading and Risk Management Contract (“the CTRM Contract”) was in due course signed by both parties, effective from 10 January 2013. By Article 27.1 the CTRM Contract was subject to English Law and, by Article 27.2, to the jurisdiction of the High Court of England and Wales.

There is a key dispute between the parties as to whether there was, as a result, a single contract for the supply, development and implementation of a new system or separate contracts for the licensing of TPT’s software and for the development and implementation of the new system.

In any event, the project to develop and implement the CTRM system proceeded throughout 2013 and into 2014. The factual and expert evidence at trial was substantially concerned with what happened during this period, TPT’s performance, the delay to the project and the responsibility for that delay.

In the course of the project, TPT issued invoices related to the Order Forms. In May 2014 TPT demanded payment of these invoices. PTT denied that payment was due because it said payment only became due in accordance with milestones in the CTRM contract and those milestones had not been achieved. TPT’s position was that payment was due pursuant to the Order Forms and that its continued performance was conditional on payment. From about the end of May 2014, TPT ceased work on the project on the basis that it was not obliged to continue when its invoices remained unpaid.

On 16 February 2015 PTT served notice on TPT which required TPT to remedy breaches of contract. Those breaches can broadly be characterised as failing to provide adequately skilled and experienced staff to carry out the project, failing in various respects to provide the system functionality, and failing to progress the project to complete within the contractual timescale. PTT then terminated the contract by notice dated 25 March 2015 relying on two contractual clauses as entitling them to do so, alternatively at common law.

In these proceedings, TPT claims payment on the invoices; it denies that the termination was lawful; and it claims payment for the value of services prior to termination. PTT disputes that any payment is due; it counterclaims liquidated damages for delay and unliquidated loss and damage resulting from the termination.

In accordance with the Court’s directions, by the time of the PTR, the parties had agreed a list of issues. This judgment, to a large extent, follows the structure of the list of issues. The issues encapsulated the disputes between the parties but, in a number of instances, did so in very broad terms and involved a degree of repetition.

The issues were these:

Delay to the Project

Whether the delay to and/or ultimate failure of the project was caused by:

Suspension

Whether, on TPT’s case, the parties entered into an express and/or implied agreement (whether by variation to the CTRM Contract or collateral or supplemental agreement by conduct or otherwise) to the effect that:

Whether the state of civil unrest in Thailand from November 2013 to May 2014 constituted an event of force majeure pursuant to Article 16 CTRM Contract such as to suspend TPT’s contractual obligations during the period of unrest.

Whether TPT was in breach of contract such as to entitle PTT to terminate the CTRM Contract under its terms or at common law by reason of its negligent failure to follow appropriate or internationally recognised and applied methodologies for the design, development and implementation of the software; its negligent failure to conduct adequate business analysis and/or produce adequate business blueprints so as to address inadequacies in the functionality of the proposed CTRM system to meet PTT’s requirements in respect of functional integration and/or invoicing functionality and/or interfaces between CTRM and SAP and/or reporting functionality; its failure to provide adequate staff resources and/or its negligent failure to manage the project and/or the resultant delay to the Project.

Whether TPT’s refusal to perform the CTRM Contract from May 2014 constituted a repudiation of the CTRM Contract.

Whether PTT’s refusal to pay licence fees or maintenance fees in respect of TPT’s software on the date set out in the Order Forms amounted to a renunciation of the CTRM Contract or (on TPT’s case) any separate contract(s) contained in the Order Forms.

Whether PTT’s notices to remedy breach of 5 September 2014 and/or 16 February 2015 and/or its notice of termination of 23 March 2015 constituted repudiatory breaches of the CTRM Contract.

In the light of the findings made in respect of Issues 8, 9, 10 and 11, the means by which the CTRM Contract was terminated.

Whether PTT is entitled to recover damages in respect of all or any of:

As I have said, a key issue in this case is whether there was a single contract (the CTRM contract) or a number of contracts (the CTRM contract and further software licence agreements). I address this issue first (in Part 2).

There are a number of disputes between the parties as to construction of the express terms of the CTRM contract and implied terms. In Part 3 I set out the further express terms of the Contract that are material to the disputes. I address these issues as they arise in the context of this judgment. I also consider the parties’ cases on implied terms.

In Part 4, I then consider the various allegations of breach or complaints about conduct that are made by each party against the other.

Both parties have made a variety of complaints about the other’s conduct during the course of the project and there was extensive evidence on both sides to support or refute those complaints. The complexity of this case has been contributed to by two characteristics of these cases:

Against this background, I approach this by considering first, and briefly, the history of the project and the complaints/ allegations of breach of each side before I turn to consider the impact of my findings on the contractual relationship between the parties.

In Part 5, I consider the issue of Suspension and in Part 6 Force Majeure.

I then address the issues of Termination (Part 7) and Damages (Part 8).

Witness statements were served on behalf of the following witnesses, all of whom also gave evidence at trial.

TPT’s witnesses were:

It was clear that in each case, as one might anticipate, witness statements had been written for the witnesses to sign. In the case of Mr Olsen and Mr Woods in particular, it seemed to me that their statements had to a large extent been put together from documents that were regarded as “helpful” but which did not necessarily reflect their context; that they had paid little regard to what evidence they could genuinely give from their own knowledge; and that they were, as a result, uncomfortable with some of the evidence their statements purported to give. Mr Novobranec seemed much more in command of his evidence.

PTT’s witnesses (with the exception of Mr Gufler) were all Thai. During the project, the language of communication was English. The witnesses gave their evidence with the aid of an interpreter although, at my suggestion, giving their evidence in English when they were comfortable doing so. They were addressed in the Thai form with the title “Khun” and their first name and I refer to them in this way in the judgment. They were:

Cross-examination of PTT’s witnesses, other than Khun Donnaya and Khun Yingyong, was somewhat limited. I regarded Khun Donnaya, Khun Jittipan, Khun Chanettee and Mr Gufler as witnesses who gave their evidence in an open and straightforward manner. Khun Yingyong and Khun Taveesuk were also credible witnesses but more evasive in their answers.

Both parties also adduced expert evidence. It is convenient at this point to make some general observations about that evidence.

TPT adduced the expert evidence of Mr Dan Look. Mr Look is a senior partner of management consultancy, Baringa Partners LLP, who had considerable experience with CTRM systems. His report disclosed the fact that he had worked on projects involving TPT, both in partnering TPT on project proposals and with prospective clients of TPT. He was, in due course, cross-examined on the relationship between Baringa and TPT. He said that the relationship had ebbed and flowed over time and that he had had no dealings with TPT since 2013. I regarded Mr Look as a frank and honest witness who fulfilled his duties to the Court. There was clearly some relationship between him and his firm, Baringa and TPT that may have influenced his evidence but only, in my view, in the sense that he viewed matters from the standpoint of a vendor of software and not in the sense that is affected the independence of his evidence. Nonetheless, I did not find his evidence of particular assistance or relevance and I place little reliance on it for the reasons I address later in this judgment.

PTT adduced the expert evidence of Dr Christopher McArdle, managing director of Innotec Ltd. a technology consultancy. I also found Dr McArdle to be a frank and open witness doing his best to assist that Court and I gained greater assistance from his evidence than from that of Mr Look.

Although neither point was pursued in submissions, in cross-examination, TPT made two challenges to Dr McArdle’s independence. Firstly, it was suggested that Dr McArdle was being less than frank about his involvement in the case and was acting as an advocate for a case that he had formulated. The basis for this submission was that in his report, Dr McArdle said that he had visited Thailand in April/May 2015 to garner background information whereas, an application made by PTT’s solicitors for an extension of time to serve the Defence and Counterclaim was supported by evidence to the effect that Dr McArdle was investigating TPT’s performance for the purposes of drafting the pleading and that his input was necessary to produce a draft. Dr McArdle accepted that part of his role was to provide information for the pleading and he said that he had provided his notes for that purpose. I can see no merit in this point. It is entirely common and proper practice for an expert to be instructed and to have input into a pleading. It is difficult to see how in any case of technical complexity, it would be possible for a party to formulate its case without such assistance and, in cases of professional negligence, it may be improper for a party to plead and pursue a case that is not supported by expert evidence. I could not see that Dr McArdle was seeking to downplay his role by his description of it or that he was otherwise engaged in anything improper that could in any way affect my assessment of his evidence.

Secondly, in a number of instances that were put to him from the experts’ joint statement, Dr McArdle had declined to express a view on matters raised by Mr Look. In particular he had characterised matters that Mr Look addressed as ones of contract formation or construction which Dr McArdle said were outwith the scope of his instructions. I assume that I was being asked to infer that Dr McArdle was illegitimately – by wrongly characterising matters as outwith the scope of his instructions or by relying too heavily on the scope of those instructions - seeking to avoid expressing opinions on matters where he would be in difficulty expressing an opinion that was contrary to that of Mr Look and supportive of PTT’s case. In my view, this attack was wholly unfounded. Dr McArdle was commendably cautious in not expressing his views on matters which he considered to be matters of fact or law for the Court. It is unnecessary for me to consider whether on each and every occasion he formed the correct conclusion as to where the line was to be drawn between fact and law on the one side and opinion on the other. The short point is that I saw nothing to lead me to believe that Dr McArdle was using this approach as a smokescreen.

As I have set out above, following TPT’s bid and the process of clarification, a standard form document, which is described as a letter of intent, was then sent by PTT to TPT on 28 December 2012 and signed by Mr Kanago of TPT on 10 January 2013. The document simply referred to the provision of the Commodities Trading and Risk Management system for the sum of “Six Million Nine Hundred Twenty Thousand”, stating “Payment shall be made by milestone”.

On 31 January 2013, an Order Form (for which I adopt the description Order Form A) was sent by TPT to PTT. The Order Form identified software products to be supplied. Against “Commodity XL for Oil & Refined” a price of $2,589,200 was given under the heading “License Fee” and further software was “included”.

Order Form A also included the following:

The total of the sums referred to is therefore $6,920,000 in accordance with the letter of intent but the sums due for payment under the Order Form, on its face, are only the product licence fees.

The terms of the Triple Point Software Product License Perpetual License Agreement were also attached. They include the following:

Thereafter the parties signed a Contract for Commodity Trading & Risk Management (CTRM) System (“the CTRM contract”). The contract was signed by TPT on 31 January 2013 and by PTT on 8 February 2013. At Article 14 the CTRM contract expressly provided that it became effective as from 10 January 2013. There is no dispute about this. That date is, of course, earlier than the date of Order Form A.

It is necessary at this point to set out some of the terms of the CTRM contract:

The project plan referred to under Article 18 gave the following milestone dates:

The Order Form referred to in Exhibit 3 is Order Form A. There were two further order forms which have been referred to as Order Forms B and C, and I deal with these further below.

The TOR Section 23 Deliverables provided as follows:

“The Vendor shall provide deliverables in each phase documented in writing and signed by authorized officer(s) of Vendor.

The Vendor shall provide template for all deliverables and document format during activities to PTT at the beginning of the project.

Standard processes/practices and documentation must be approved by PTT/

Vendor shall submit deliverables to PTT as defined in the detailed milestone below.

Beneath this was a lengthy table which I do not propose to set out in full. The table comprised three columns: Phase; Milestone and Activity; Deliverables. The Milestones were those set out in Article 18 plus “Other deliverables”.

The Milestone and Activity column identified the services to be provided within each milestone. For example:

The “Deliverables” column identified documents to be provided against each of these activities. For example, against item 2.1, the deliverables were AS-IS process mapping and analysis including Organization Structure and Key Data Structure; and against item 2.2, Functional Requirement, Gap/Change Analysis report. Detail Business Blueprint and Detail Business Blueprint Narrative. As TPT rightly said, there was no express reference to software in the work within the milestones or within the “Deliverables”.

The issue that firstly arises between the parties is whether there is a single contract (the CTRM contract) between the parties and a single basis for payment under Article 18 or whether payment of licence fees is due under the terms of Order Form A which gives rise to a free-standing contract and creates a distinct payment regime, in respect of software licences.

In the Amended Particulars of Claim, TPT claims sums in “the Order Form Contracts”. There was no further pleading of TPT’s case as to the formation of a contract based on the Order Form or the terms of that contract.

In the light of PTT’s case that the parties’ relationship was governed solely by the terms of the CTRM Contract, TPT set out its case further in its Amended Reply and Defence to Counterclaim. That case was that the Order Form A and the CTRM Contract were related but separate contracts. In respect of Order Form A, having set out the payment terms, TPT said this:

“The Order Form A Payment Dates were also the subject of express discussions between TPT (through Mr Sandip Kanago) and Mr Simon Woods) and PTT (through Mr Vallop Amatayakul, Ms Donnaya Senanarong, Mr Taveesuk Sayasilapee, Ms Pornnate Sathirakul and Mr Phillip Gufler) including at a meeting on or around 14 December 2012. It was expressly agreed at this meeting that (a) Order Form A would specify calendar dates for payments and (b) the Order Form Payment Tranches would be payable on the actual calendar dates set out in Order Form A, rather than the contract milestones of the CTRM Contract.”

As I understand it, TPT’s case was that Order Form A, properly construed, provided for payment on calendar dates and, in the alternative, that the agreement reached on 14 December had that effect whether as a collateral contract, warranty or variation. TPT argues that the negotiation and agreement of the terms of the Software License Agreement evidences the intention of the parties to enter into a distinct contract for software licences. I observe that the matters said to have been agreed on 14 December 2012 go, as such, to the meaning of the terms of the Licence Agreement rather to support the assertion that it formed a distinct contract. TPT’s point, however, is that the negotiation and agreement of the terms of the Agreement evidences the intention of the parties to enter into a distinct contract for software licenses.

Given the nature of TPT’s case, both parties adduced factual and expert evidence as to how the contract or contracts had been negotiated and had come to be formed.

So far as the relevance of that evidence is concerned, I have borne in mind the successive guidance of the Supreme court in Rainy Sky SA v Kookmin Bank [2011] UKSC 50; Arnold v Britton [2015] UKSC 36; and most recently Wood v Capita Insurance Services Ltd. [2017] UKSC 24. In this most recent case, Lord Hodge rejected the submission that Arnold v Britton had involved a “recalibration” of Rainy Sky away from the consideration of the so-called factual matrix. He summarised the present position on the law as follows:

“11.

…Interpretation is, as Lord Clarke stated in Rainy Sky (para 21) a unitary exercise; where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense. But, in striking a balance between the indications given by the language and the implications of the competing constructions the court must consider the quality of the drafting of the clause …; and it must also be alive to the possibility that one side may have agreed to something which with hindsight did not serve his interest …. Similarly, the court must not lose sight of the possibility that a provision may be a negotiated compromise or that the negotiators were not able to agree more precise terms.

12.

This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated …. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival construction or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.”

With the comfort of that guidance, I shall consider first the factual evidence that was adduced.

Copies of TPT’s Software License and Maintenance Service Agreements were included with its bid. As part of the clarification process, under the heading of the Maintenance Agreement, PTT included a note to the effect that the Software License Agreement and Maintenance Agreement were under review by their legal department but that “PTT reserves the right to maintain all terms and conditions of the TOR in case there is any conflict with the Software License Agreement or Maintenance Agreement”. TPT’s response was “OK, however we believe the same will be discussed with us and concluded by mutual agreement.”

Mr Kanago of TPT gave evidence on the issue of the negotiation of the License Agreement. In his written witness statement, he said that TPT received comments from PTT’s legal department on 8 November 2012. One of these comments was as follows: “Please confirm that the Software License Fee is included in the Contract Price so PTT will not be charged the Software License Fee under this License Agreement.” Mr Kanago said that the parties then exchanged drafting comments. He provided a table of relevant e-mails. None of the documents referred to by Mr Kanago expressly responded to this question, although no change was made to the terms of the draft License Agreement. The emphasis of later e-mails was on the terms of clause 10.9 to which I refer below.

Mr Kanago then gave evidence about the meeting with PTT (represented, amongst others, by Khun Donnaya and Mr Gufler) on 14 December 2012 to discuss the bid. He said that payment regimes were discussed: “We explained to PTT that we needed to receive payments for our software on certain dates and irrespective of progress through implementation milestones.” That was, he asserted, important and standard practice. There was, however, in my view, nothing in Mr Kanago’s statement to support the case that there was an agreement to this effect at that meeting. His second statement which stated that the payment terms in Order Form A were “anticipated” at the meeting on 14 December 2012 reinforces the impression that payment terms were far from agreed.

The evidence of Khun Donnaya was that she was certain that no such agreement was reached at this meeting since PTT had not even seen an Order Form and did not do so until January. In cross-examination, she maintained that she did not recall discussion of the Order Form.

Mr Kanago also attended a meeting on 10 January 2013. He said that he took with him a draft Order and explained that TPT would insert dates for payment. The unchallenged evidence of Mr Gufler, who attended this meeting, was that Mr Kanago had explained that the dates would be inserted because the software could not be supplied without dates but that payment would be against the milestones. Following this meeting, Mr Kanago then sent out the Order Form. Internal e-mails between Mr Gufler and Khun Donnaya reflected PTT’s understanding that TPT had to issue invoices for audit reasons but that payment would be against the milestones. Accordingly, on 15 January 2013, Mr Gufler e-mailed Mr Kanago (copied to Mr Woods) seeking a number of clarifications including whether it was possible “to add the wording “payable according to TOR/Contract” to the payment terms of the order form”. Mr Kanago’s response was “Triple Point: Shall revert”. That response itself was inconsistent with any agreement having already been reached as to different payment terms. An amended version of the Order Form was sent on 22 January 2013 (which included “no later than” dates for payment).

Mr Woods gave brief evidence about this in his written statement to the effect that he had been responsible for amending the Order Form – it is not clear to me at what point - to refer to “no later than” dates. To quote from his statement, he said: “I was alert to the need to avoid reference to the TOR because I wanted to keep it clear that the Order Form governed payment for our license fees (I refer to my email to Mr Kanago of 21 January 2013.)” Mr Woods’ statement plainly seeks to create the impression that there was already agreement that the Order Form governed payment and did so by reference to calendar dates. In fact his e-mail to Mr Kanago said: “I have also updated the Order Form so that all payments are “no later than” on the payment dates. I want to see if we can avoid mentioning the TOR on the Order Form. That will cause us issues.” Whatever this means, it does not seem to me to be in the least consistent with there having been an agreement in December 2012 that payment of license fees would be on calendar dates.

Mr Kanago’s evidence was further that PTT then pushed for amendments to make payment contingent on milestones but that these were not agreed. His statement referred to a number of e-mails in support of this contention. Without setting out the content of each of them, my review of the e-mails shows that there was no express discussion of payment by reference to milestones but that the emphasis was again on the terms of clause 10.9. The final version of that clause included in the Order Form A was as set out above. It does not expressly address the question of payment and, as I say below, it does not seem to me to support the case that there was distinct negotiation and agreement of payment terms for the software licenses which provided for payment on calendar dates. Although it is not, in my view, relevant to the issue of construction as such, it was in fact the case, as Mr Kanago confirmed in cross-examination, that TPT wanted the Order Form, License Agreement and maintenance agreement included in the Exhibit to the CTRM Contract.

For completeness, I should say that there was also expert evidence adduced on this topic. Mr Look set out his instructions in his report and recorded that he had been expressly asked to address “What is common industry practice in relation to the invoicing of the software and services provided by a CTRM vendor? What is common industry practice related to the payment of the vendor invoices?” In answer to this question, he said that typically a vendor would invoice the license fee, in full, on the signing of the contract and before the implementation project commenced. Further, he said that he had not previously seen an instance where a licence fee was invoiced in line with project implementation milestones but he went on to explain, based on discussions with other vendor contacts, that due to US accounting rules relating to recognition of revenue, there was a strong incentive to contract and invoice for software licences separately from implementation services.

Mr Look was offering the Court the benefit of his and others experience in connection with an issue which he had expressly been asked to address but I do not find his evidence on this issue to have been of any assistance to the Court. There are, of course, circumstances in which knowing how things are usually done in a particular trade or service area can assist in interpreting the actions of the parties and that may go as far as assisting in the interpretation of a contract that they have entered into but the Court starts with the words used by the parties and, in appropriate circumstances, the background facts in a particular case. Evidence of what is allegedly usually done is of tertiary, if any, value. Certainly what the Court must, in my view, be careful not to do, is to try to fit the words and the facts to what one party says is the usual form. In any case and on any view, the parties in this instance did not agree (as Mr Look said was typically the case) that all software licence fees would be paid upfront and before implementation services commenced. What Mr Look’s second-hand evidence at most did was chime with what PTT’s witnesses said they were told about the need to include dates for audit purposes.

I approach this issue, therefore, principally as a matter of construction of the documents that formed the Contract.

I start with the CTRM Contract. It seems to me that the definition of the contract itself is necessarily of central importance. As set out above, in Article 1, the definitions clause, the Contract is defined as the Contract relating to “the Services … together with the documents referred to as its Exhibits”. Article 28 provides that the Contract consists of the Contract document and the Exhibits thereto. The natural reading of those definitions is that “the Contract” includes the documents in the Exhibits. In the light of this definition, putting it at its simplest, I find it difficult to see how it can be argued that Order Form A gave rise to a distinct contract. The Order Form is, as Mr Howells QC, on behalf of PTT, said repeatedly, bound into the CTRM Contract.

In answer to this point, Mr Stafford QC for TPT relied primarily on the argument that the CTRM Contract is only the Contract for the development of the software and implementation of a new system. He relied on the following matters:

Secondly, TPT emphasises that the payment provisions in Article 18 are framed in terms of achievement of milestones. Invoices for each milestone are to be submitted with sign-offs for the deliverables. There are, say TPT, no “deliverables” in terms of software licenses so that there is no way of ascertaining when payment is due for software.

On TPT’s case, these arguments support the contention that Order Form A gave rise to a separate contract and one that provided for payments on calendar dates. There is undoubtedly some attraction in TPT’s argument but, in my judgment, it fails for the following reasons.

Firstly, absent the surrounding circumstances, the placing of an order for software accepted by the vendor would indeed, in the normal course, give rise to a contract. But what happened here was that the Order was placed in the context of the negotiations for the CTRM Contract: the CTRM Contract took effect from a date prior to the date of the Order and incorporated the Order. Given that the parties expressly agreed to the legal fiction that the CTRM Contract incorporating the Order already existed at the time the Order was, in fact, placed, it simply cannot have given rise to a fresh contract unless it was intended to supersede the CTRM Contract which it patently was not.

If there were any doubt about that, it was expressly addressed by the parties’ agreement to the terms of clause 10.9 of the Software Licence Agreement itself in which the parties expressly agreed that the Software License Agreement did not supersede the CTRM Contract. Indeed, as I have set out above, on my assessment of the evidence, it was this clause that was at the centre of negotiations between the parties as to the terms of the License Agreement. Further, and having started with consideration of the terms of the CTRM Contract, I observe that the provision of this Clause 10.9 that the Entire Agreement shall be the terms of this Agreement and the CTRM Contract is inconsistent with TPT’s case that these two documents formed separate contracts but consistent with the incorporation of the Software License Agreement into the CTRM Contract.

Secondly, and in any event, I do not think that the CTRM Contract should be construed in the way that TPT argues as only being concerned with the provision of implementation services. There are clearly a number of references which point this way but the contractual references are not all one way:

TPT also contends that, if the CTRM Contract is construed as encompassing provision of software, lacunae appear which do not otherwise exist:

In my judgment, for the reasons set out above, the CTRM Contract is, as PTT contend, the sole contract governing the relationship between the parties including the supply of software and the corresponding software licences.

Again for completeness, I should address two further arguments.

Firstly, reliance was placed at trial by PTT on Article 29 (Order of Precedence). Before I deal with the specific issue that arises, I should say that, to my mind, the terms of Article 29 in and of themselves support PTT’s position. If Order Form A gave rise to a distinct contract, what would be the point of a precedence clause in the CTRM contract which included Order Form A? There would be none, since there would never be an issue of having to take account of Order Form A in the construction of a different contract, the CTRM Contract.

The specific point arose this way. On TPT’s case, there was provision in Order Form A for part payments for software on specified dates and not in accordance with milestones. PTT denied that was the proper construction of Order Form A in any event and maintained that, if relevant, it provided for payment against milestones. If, however, TPT’s contention was right, then PTT’s position was that it created a conflict between the CTRM contract and Order Form A: that conflict should be resolved in favour of Article 18 because of the order of precedence in Article 29. TPT’s answer to that submission was that there was, in any event, no conflict because there were, in essence, separate payment regimes for the software licences and the implementation services.

If the effect of Order Form A was that payments for software were due on the specified dates, then, given the view I have formed as to the scope of the CTRM contract and the application of Article 18, there would be a conflict between Order Form A and the Article 18 and I find that the effect of Article 29 would clearly be that Article 18 takes precedence.

Secondly, as I have said, PTT contended that, even if the terms for payment for software licences were to be found in Order Form A, then the payments were due on completion of milestones and not on specific dates. I accept that argument and I do so as a matter of construction of the document. Put shortly, if the payments were to be made on specified dates, then there would be no need to refer to stages of the project, particularly not ones that are concerned with the implementation of the project. The “not later” than dates indicate when stages were anticipated to be commenced or completed and not final dates for payment.

TPT have drawn attention to the fact that the dates/ percentages do not necessarily match the dates in Article 18. Given the conclusions I have reached above that would create a conflict with Article 18 and Article 18 would take precedence.

The genesis of this action was TPT’s claim for payment of invoices issued “pursuant to Order Forms” being Order Form A and Order Forms B and C which I consider below. It follows from my decision on the nature of the contractual relationship between the parties that TPT is only entitled to payment under the CTRM contract and not “pursuant to” Order Form A.

By March 2014, the project had fallen behind. On 19 March 2014, the parties agreed that PTT would pay against milestones 1 and 2. There was a dispute between the parties as to whether that agreement was “conditional” but it is common ground that it was agreed that TPT would provide a Revised Project Plan which they did thereafter. The revised dates (which PTT says were agreed and TPT disputes) were 20 January 2014 for milestone 2 (which had already passed); 30 April 2014 for milestone 3; and 11 June 2014 for milestone 4.

On 20 March 2014, TPT issued an agreed invoice for Milestones 1 and 2 in the sum of US$1,038,000 which was duly paid. The sum represented 15% percent of the total Contract Value (that is US$6,920,000) and it was the clear evidence of Mr Woods who was party to the agreement on 19 March 2014 that that superseded all previous invoices. Indeed, Mr Woods evidence was that the approach subsequently adopted by TPT (Mr Walsh) of demanding payment against earlier invoices as a condition of further performance was not discussed with him and was contrary to the agreement he had reached.

None of the other milestones under the CTRM contract were achieved whether in accordance with the original or the revised dates and no further payments were due.

Order form B was dated 30 April 2013. It related to Phase II and provided for additional product licence fees and maintenance fees for additional users. Under the heading “Terms and Conditions of Sale” there was the following:

“Order Form is subject to the terms and conditions set forth in CTRM contract, dated 8 February, 2013.”

Under the heading “Payments”, the order form stated that the sum of US$780,000 was “due on 15th January 2014”. That sum was for the additional users and maintenance fees. In contrast to Order Form A, this was a fixed date for payment rather than a “no later than” date.

Order Form C was also dated 30 April 2013 and also related to Phase II. It was in respect of licences and annual maintenance for additional modules in the CXL software. Order Form C similarly provided that it was “subject to the terms and conditions set forth in [the] CTRM contract …” and under “Payments” set out sums due on specified dates between 30 April 2013 and 15 January 2014.

I have assumed for the purposes of this part of the case that the issue of the Order Forms confirmed in writing an agreement entered into by the parties. I emphasise that that is an assumption, as PTT’s case is that the Order Forms could not give rise to a contract, and it is unnecessary for me to decide this point. Despite the identification of payment due dates, it was clearly the intention, not least of TPT, that the provision of software/ maintenance under the Order Forms was subject to the terms of the CTRM contract. TPT argues that this reference is “empty” because the CTRM contract governs only the provision of services. For the reasons, I have already give, I do not accept that and, if anything, this reference to the CTRM contract in the further Order Forms, is a further indication (albeit post-contract) that the CTRM contract was not intended by the parties to be so limited.

It seems to me that the provision that the Order Forms are “subject to” the terms and conditions of the CTRM contract implies two things: firstly that the Order Forms were intended to contain a variation to the scope of supply under the CTRM Contract and secondly, and even if they gave rise to distinct contracts, that payment for additional user licenses, software licences and associated maintenance was to be made when the system was live and additional user licenses, software and maintenance were provided. That never happened. It would make little commercial sense to construe the Order Forms as giving rise to an agreement to pay for licences for users and software that has not been supplied and maintenance that cannot yet be carried out. The “subject to” wording avoids this commercially improbable position.

To the extent that that begs the question as to the purpose of the due dates, there was in relation to this issue a body of evidence, both written and oral, that supported PTT’s case that it was the subjective understanding of TPT that the dates in the Order Form were there purely for the purpose of revenue recognition in internal accounting and that there was no expectation of payment on fixed dates but rather that the CTRM contract milestones would apply. It is unnecessary for me to recite the entirety of that evidence but I find as a fact that that was TPT’s internal understanding. It was confirmed by the exchange between Mr Kanago and Khun Donnaya in May 2013. When the first invoice (number 17465) was sent out under Order Form C Khun Donnaya e-mailed Mr Kanago saying that payment would be made in accordance with the CTRM contract and “So, we will disregard this invoice.” Mr Kanago replied the following day:

“The payments will be as per the milestones defined on the PTT CTRM contract.

As per our audit requirement we have to rise (sic) invoice upon order execution, however payment will be upon milestone sign off. Thanks.”

My conclusions on the issues under Part A are therefore as follows:

I have set out above, the terms which I considered material to the issues raised under Part A. Before I address the remaining issues, it is necessary to set out further certain express terms of the contract which are material to those issues.

As is apparent from the issues in Part B (paragraph 15 above), TPT also contended for two implied terms of the Contract.

The first of these implied terms sought to make TPT’s obligations to perform under the CTRM Contract conditional on the payment of the sums said to be due on specified dates under the Order Forms, no distinction apparently being drawn between the Order Form bound into the CTRM Contract and those that were issued later.

Although the issues were not framed in this way, it seems to me that that argument could only arise if the Order Forms resulted in discrete contracts. I have held that Order Form A did not give rise to a discrete contract. Even if it did, I do not consider TPT’s case to be sustainable. In its Opening Submissions, TPT argued that this term was to be implied either as a matter of obvious inference or business efficacy. Firstly, it was said that the pursuit of the implementation services could not be carried out unless PTT had the right to use the software. It simply does not follow from that, as a matter of obvious inference, either that the parties must have agreed that payments would be made on fixed dates or that if payment was not made, TPT had the right to suspend or cease performance. Secondly, it was argued that, since the CTRM Contract could be terminated at PTT’s discretion and Article 15.5 only provided for payment for services to the date of termination, business efficacy required some means of payment for the software licences. This “business efficacy” argument seems to me to be no more than an argument in support of there being discrete contracts and I have dealt with it in that context above. It would not follow that because there was a distinct right to payment for the software licences that, if they were not paid for, TPT would have the right to suspend or cease performance.

In relation to Order Forms B and C, my primary view is that they did not give rise to discrete contracts but that, even if they did, they were subject to the payment provisions of the CTRM Contract. If they were not, nonetheless, TPT’s case would be unsustainable for the same reasons as in respect of Order Form A.

The second implied term was what might be called the usual implied term as to co-operation. I do not intend to examine in this judgment how the contention that there was such an implied term arose on the pleadings. Suffice to say that the contention that there was such an implied term and that PTT was in breach of that implied term arose initially as a defensive response to PTT’s case that there was a total failure of consideration.

By the time of trial, PTT had accepted that the term itself was uncontentious. I, accordingly, find that there was such an implied term. What remained contentious, however, was what amounted to a lack of co-operation and a breach of this implied term.

In this context, TPT relied heavily on the decision of His Honour Judge Toulmin CMG QC in Anglo Group plc v Winther Brown & Co. (2000) 72 Con LR 118. That case concerned the supply of a standard computer system (Charisma) from a company, referred to in the judgment as BML, to the defendant, Winther Brown, who alleged that the system was defective, a claim that ultimately failed. At [125] to [128] the learned judge said this:

“125.

…It is well understood that the design and installation of a computer system requires the active co-operation of both parties. Frequently a client employs a consultant to assist it in the process …. WB did not do that in relation to Charisma. Instead it invited proposals from selected hardware and software supplies and developed its requirements in discussions with potential suppliers. It is clear that WB was always interested only in a package system and was not prepared to spend money on bespoke software which could adapt the computer system to WB’s particular working practices. It was almost inevitable in these circumstances that while Charisma (or any other standard system) could be expected to provide an 80% fit or better with WB’s existing procedures, it was unlikely to provide a 100% fit. This meant that it was inevitable that there would be some procedures of WB which WB would have to adapt to Charisma.

….

127.

The duty of co-operation in my view extends to the customer accepting where possible reasonable solutions to problems that have arisen. In the case of unimportant or relatively unimportant items that have been promised and cannot be supplied each party must act reasonably, consistent, of course, with its rights.

….

128.

In relation to a contract for the supply of a standard computer system, it is an implied term that:

(a)

the purchaser communicates clearly any special needs to the supplier;

(b)

the purchaser takes reasonable steps to ensure that the supplier understand those needs;

(c)

the supplier communicates to the purchaser whether or not those precise needs can be met and if so how they can be met.

…”

It seems to me, firstly, that the passages TPT relied upon (and which I have emphasised) must be read in the context of the facts of the case. The case concerned the provision only of a standard system. In the course of trial, in both submissions and cross-examination, TPT sought to draw a distinction between a bespoke system (which it said PTT had not contracted for) and a packaged system, mirroring the terminology in the passages above. Whatever terminology one applies, it is clear that the court in Anglo Group was concerned with a standard system with no customisation to the purchaser’s requirements. That was not the present case: PTT’s requirements were set out in the TOR and, as will be seen, TPT agreed to the customisation of its software to provide the specified functionality. The judge’s examples of an active duty to co-operate must be considered in that differing context and there is no reason why a duty to co-operate should extend to the acceptance of compromises in the purchaser’s specified requirements.

In any event, the learned Judge’s findings as to implied terms must necessarily be fact and contract specific and do not establish some general principle applicable to all software contracts. The scope of the duty and whether there was any breach must be considered in the context of this contract and project. Any consideration of the scope of the implied term must, in my view, also take account of the fact that there was an express term as to co-operation (Article 7) which at the least indicates what it was that PTT expected to have to do and what TPT expected from them.

The issue as to the scope of the implied term arose in circumstances in which, as appears below, TPT’s case was expanded upon and took on rather greater significance, in the course of these proceedings from what might have appeared from the pleadings. Firstly, there was a much expanded case as to the respects in which PTT were said to be in breach of the implied term. Secondly, TPT said this:

“TPT’s reliance on the term is intended to frame and illustrate the proposition that TPT was not responsible for the delays to the project and that the 460 day time line for phase 1 of the project as contained in Article 5 CTRM is not engaged.

It also forms part of TPT’s defence to PTT’s negligence claim: the allegations as to negligent project planning, project management, business blueprint processes, and so on, are tightly linked in PTT’s case to delay. TPT explains that in fact, those issues can be traced to PTT’s working practices (and the inadequacies in the TOR).”

In respect of issue no. 4:

In order to address issue no.5, it is necessary for me first address the parties’ cases on breach which in turn requires the context of the terms of the TOR and the Technical Specification/ clarifications and a short chronology referencing some key dates in the progress of this project.

The TOR was bound into the Contract together with the so-called Technical Document (Clarification) and their terms are obviously material to allegations of breach. However, given how TPT’s case is put, it seems to me proper also to make some reference to TPT’s Bid in response to the TOR.

Part III of the TOR was headed “Project and Services”. Under this heading, there were a number of broad statements about the projects:

“Project Objectives

To implement a Commodity Trading & Risk Management System for [PTT companies in Thailand, Singapore and Dubai] …in accordance with the requirements described in this Terms of Reference (TOR).

Responsibility for the System

The Vendor shall ensure that the System will provide the facilities, functions and performance standards as set out in this TOR. If modifications are needed or changes required to the system to meet the requirements stated in this TOR, it is the Vendors duty to clarify and specify in their submission of any inadequacies or insufficiencies in their system that require a functional change.

In the event that the System supplied by the vendor is inadequate to meet the requirements as laid out in this document …. the Vendor, at their own expense, shall provide all additional items of software and/or hardware (if applicable) which are needed for the System to meet all the requirements as laid out therein. Any and all modification to the Vendor’s existing system must be agreed upon in writing by PTT.

…

Project Office

…

The Vendor shall designate a Project Manager, to be approved by PTT, and the Project Manager shall be the primary point of contact for PTT with the Vendor. The Project manager will be responsible for directing and coordinating the delivery, installation, testing, training and support of the CTRM software and all work and services which are to be executed or provided by the Vendor within this TOR.”

If it were not already clear from these general requirements, the TOR went on at section 4 to require that the Vendor must “customize the CTRM system in order to make the system works (sic) properly in accordance with all requirement as stated in this Terms of Reference at the Vendor’s expense.”

At section 21, the TOR expressly required the Vendor to integrate their CTRM system with PTT’s deployment of SAP.

Finally, the TOR set out 621 specific (largely functional) requirements.

The bid was sent under cover of a letter dated 7 September 2012 the contents of which were in large part repeated in the bid. The letter stated that TPT proposed the use of its Commodity XL (CXL) platform. It made no express reference to the Softmar/VO software. It referred to a number of customers all of whom it said had “SAP integration as part of the deployment”. It said that the bid included “Compliance with all PTT functional and technical conditions – or where compliance is not possible “out of the box” a customisation plan for full compliance is included.” None of these statements is relied upon as founding TPT’s contractual obligations but they make it clear that TPT was seeking to assure PTT that they could provide what PTT wanted and that they understood customisation would be necessary. They did not draw to PTT’s attention that TPT’s proposed system in fact involved multiple software platforms and they did nothing to alert PTT to any issues with the TOR. It was not until a list of software licences that there was any reference to “Softmar Chartering and Vessel Operations”.

Extolling the virtues of CXL, TPT said that it was “a comprehensive front to back office trading, risk management, chartering, credit and hedge accounting solution” and “a fully integrated product with SAP with multiple touch points”.

Under the heading “Freight and Vessel Management” TPT said that its commercial operations solution was Softmar Chartering and VesselOps which provided the leading software for owners, operators and charterers to manage commercial chartering and vessel operations. Later in the document, TPT explained that the VO software had an interface to SAP at accounting level.

Having been made aware of the proposal to use two packages, CXL and VO, PTT sought clarification of the interface between the two. The Technical Document (Clarification) contains the following exchanges and clarifications:

“PTT: It’s a requirement that all Softmar transaction interfaced to CXL (including P/L, Link Freight costs to Physical deal etc.). Confirm that this customization work is included in price and scope for Phase 1.

Triple Point: Confirmed.

PTT: at the moment Softmar connected to SAP on accounting level, however it’s necessary that only 1 interface is in place. Confirm that this customization work is included in price and scope for Phase 1.

Triple Point: Confirmed.

PTT: Please confirm that the interface will be FULLY customized to PTT’s needs and no additional costs arise.

Triple Point: Yes

PTT: Please advise the workaround solution (best practice) on Chartering activities, through CXL and Softmar including FFA and up to invoicing/billing. Kindly note that Chartering is one of our trading profit center and their P/L must be pulled together on one frontend system.

Triple Point: The business process review and design documentation will clearly distinct the use and roles of both systems. Chartering, operations and voyage related activities will be captured and executed in Softmar and the integration between softmar and cxl will enable the flow of (relevant) data between the 2 systems.

PTT: Need further discussion on the process. Our intention is one system for each function and we expect operations to use CTRM only, Please confirm that the interface between Softmar and CXL will be customized (if necessary) to PTT’s requirements without any additional costs.

Triple Point: Confirmed, as mentioned earlier Triple Point will provide standard productized integration between CXL and Softmar

PTT: it only mentioned standard productized integration, please confirm that the interface will be customized to fully meet PTT’s requirements and the customization costs have been included in Phase 1 quotation.

Triple Point: Yes, by standard product integration we mean that Triple Point is going to productize integration with 14 identified touch points that will cater and enable all the required data transfer between CXL and Softmar.

PTT: In case PTT needs any customization to fully meet the requirements, please confirm that it will be done without any additional costs.

Triple Point: Integration requirements detailed in the TOR will be fully met within costs provided.

PTT: Please confirm that customization and integration to meet PTT requirements detailed in TOR will be fully met within costs provided.

Triple Point: Yes, integration requirements between Softmar and CXL will be met within costs provided.”

I will return to this point below but it seems to me that PTT was by its requests for clarification making it clear that the system it expected was one which was a single front end system – so far as the user was concerned there was one CTRM system with the functionality specified in the TOR and how that was achieved, in terms of integration of CXL and VO, was a matter for TPT. PTT was not prepared to accept existing productised integration only and wanted assurances that its requirements would be met. The conclusion which I have underlined is confirmation that TPT would provide the integration required for that functionality and not that TPT would provide only the integration specified in the TOR (which was by definition framed without reference to or knowledge of TPT’s multiple platforms).

It is not in dispute that the original project plan provided the milestone dates for Phase 1 set out above. 460 days from the Effective Date ran to 15 April 2014.

Work on the project commenced in March 2013. The work to be undertaken to produce the business blueprints involved, in general terms, the production of AS-IS and TO-BE documents and the analysis or identification of “gaps”. Mr Look provided a simple definition of a gap: “In general terms it is a difference between a requirement and the ability of the solution to provide the requirements, which needs to be addressed to form a complete solution to the business requirement.”

By August 2013, with milestones 1 and 2 not met, it was already becoming apparent that the project was in delay.

Mr Novobranec became involved in mid-July 2013. At a meeting on 19 August he advocated the need for “scope lock down” without which he considered the project would slip further. This was followed on 21 September 2013 with a revised project plan with a target go live date of 20 April 2014. In providing this update, Mr Novobranec noted that the gap list was still open but expected the process to be completed by the end of October 2013. It was not and from 9 to 11 December 2013, meetings were held in Singapore to discuss the Gap lists.

The final version of the Gap list was not produced until 5 March 2014. At the same time, there were high level meetings between 4 to 7 March 2014. By this time, TPT was telling PTT that a further 6,000 to 8,000 man days would be required to complete the project and TPT was positively advocating a phased go-live approach. In essence this meant that they would bring their existing software online but carry out any development and customisation later.

A further meeting was held on 19 March 2014 at which agreement was reached for PTT to pay against milestones 1 and 2.

Around this time there was a measure of agreement between the parties, which I consider further below, to extend the time for completion by 90 days.

Although PTT paid the agreed invoice of US$1,038,000 TPT then demanded payment of the invoices previously issued in respect of the software licenses:

TPT ceased to perform the CTRM Contract.

Each party complains about the other’s performance of this contract. In PTT’s case the complaints made against TPT amount to allegations of breach of contract and in particular breach of the obligation to exercise reasonable care and skill. Establishing that TPT was in breach of contract in these respects is material to PTT’s case as to its entitlement to terminate the CTRM contract and for damages for breach and to its claim for damages for delay. TPT’s complaints, on the other hand, are principally deployed in defence to the allegations made against it. As it was put simply by TPT “The project’s failure can be traced to the inadequacies of the TOR and of PTT’s procurement process, and to PTT’s working practices thereafter.” In essence, TPT’s position is that what might look like poor performance on their part was, in truth, down to PTT.

In respect of PTT’s “working practices”, however, TPT’s case goes further and amounts to an alleged breach of the implied term as to co-operation but no claim by TPT turns on establishing such a breach and it seemed to me that the contention that the CTRM contract contains such an implied term was background to TPT’s case that it was performing its services with reasonable care and skill, taking into consideration the difficult circumstances allegedly caused by PTT. This was an issue that I raised with the parties at the conclusion of the trial, asking whether these allegations were merely raised defensively. TPT confirmed that that was the position and that the matters complained of against TPT (re. project planning, management, etc.) could be traced to PTT’s working practices and the inadequacies in the TOR.

As I have said above, this is a case in which the allegations of breach are at best somewhat generalised and at worst amorphous. The breadth of the formulation of issue no. 5 is consistent with that view. This is not a criticism of the parties but it is a function of the types of obligations said to have been breached, the nature of the alleged breaches and the reliance placed upon them. It is also undoubtedly the case that TPT’s complaints have expanded significantly from their pleaded position.

These aspects of the case have an important effect on how I approach this part of my judgment. I take the example of TPT’s case on delay. As well as denying PTT’s allegations, TPT says that a major cause of delay to the project was PTT’s failure to co-operate in accordance with the express or implied terms of the CTRM contract. It is perhaps almost inevitable that if I were to go through the events of this project on a day by day basis – if the evidence were available to do that - there would be individual instances where I would conclude that PTT had failed to co-operate sufficiently or as well as they could have done. But an individual instance would not lead to the conclusion that there was a breach of PTT’s obligations – that is much more a question of fact and degree, involving the consideration of the particular occurrences in the context of the whole, and that informs the approach I consider I should take to the allegations made. At the same time, individual instances of alleged breach are not said to give rise to any specific delay or other consequence. Rather everything goes into the pot. Again that informs the approach I take.

At its highest level, PTT’s case was that by the time of termination, as a result of TPT’s failure adequately to carry out and/or manage the business analysis and business blueprint/functional analysis design phases of the Project, the Project was severely delayed and the proposed CTRM system did not meet the Defendant’s functional requirements.

Negligent business analysis and business blueprint/functional design:

Perhaps unsurprisingly, given the list above, PTT described integration as the unifying theme that underlay its allegation of breach in respect of TPT’s inadequate performance. I consider the specific instances of alleged lack of integration later in this judgment.

TPT’s position as originally pleaded was to assert that from April 2013 to May 2014, it had properly performed its obligations but in the context of ongoing discussion about the scope and work required for implementation. TPT contended that during 2014, the relationship between the parties was affected by force majeure and deteriorated because of PTT’s refusal to recognise the necessary additional costs associated with the expanded scope of the Project and its refusal to comply with its obligations under the Order Form contracts: “In the premises, any assertion that during the period of negotiation and reappraisal TPT was obliged to continue with the original Implementation Services (which both parties agreed were to be superseded) is artificial, misconceived and contrary to what was agreed expressly and/or impliedly and/or by conduct between the parties during that period.” I have quoted from this part of TPT’s pleading because it is frankly obscure and it sets the scene for how TPT’s case developed. It involved an argument, which apparently contradicted the assertion that TPT had performed it obligations, that it was not obliged to do so during a period of negotiation and re-appraisal. During the course of the proceedings, this contention focussed around the arguments as to inadequacy of the TOR (which it was said had expanded the scope of the project), lack of co-operation and an agreement to suspend the timelines, none of which would have relieved TPT of its obligations to perform and only the last of which would have relieved it of its obligations as to time for performance.

So far as PTT’s specific allegations were concerned, TPT’s case amounted to little more than a bare denial of these allegations coupled with the assertion that they were matters of evidence and particularly for expert evidence. I should say that do not regard that as having been a helpful response. It remained obscure throughout the trial what TPT’s response on any particular complaint was and the matter was not cured by expert evidence.

The thrust of TPT’s case instead became that PTT had misunderstood the extent to which TPT had undertaken to integrate the 3 software applications either with each other or with other applications. TPT’s case goes further because this is an aspect of the project where TPT say that PTT was at fault: the TOR they say was insufficiently specific about the integration PTT required; PTT failed to work with TPT to identify their requirements; PTT expected too much; and this led to the extensive Gap list and the potential expansion of the scope of the project.

The context in which this area of dispute arises is important. TPT, of course, contracted on the basis of providing what was required by the TOR. So any criticism of the TOR is only material as the lens through which TPT’s performance is to be viewed.

I make a number of initial observations about that case:

The main thrust of the complaint about the TOR, as I have said, is the lack of specification of requirements for integration.

In this context it is instructive to look at how TPT put their criticism of these documents in opening submissions which was that “The TOR was “inadequate as a means of defining the functionality provided by PTT’s pre-existing system, which, however, was a bespoke system designed in its entirety for PTT’s needs.” That passage seems to me to illustrate the flaw in TPT’s position. TPT’s point is less that the TOR had not sufficiently identified the required functionality but more that it was not the functionality provided by TPT’s “out of the box” system. PTT specified the functionality it required – and it may well have been the functionality of its existing system and that may well have been a bespoke system – but it was still the functionality that PTT required. It was a matter for TPT how it was provided and, if, as TPT did, it sought to provide that functionality using its standard software, it was not open to TPT to compel PTT to accept a different or lesser functionality because it was not “a bespoke system”.

Two examples are given by TPT namely of VO-CR integration and CXL-VO integration neither of which is specifically mentioned in the TOR. TPT says, as if this makes good its case that PTT accepts that VO-CR integration is not specifically listed because “the TOR did not envisage three separate applications being used.”

The decision to provide a system which was based on 3 separate software packages VO, CR and CXL (only two of which were identified as such in the bid) necessarily meant that TPT had to integrate those packages to provide the specified functionality. The identification of the specific features to be integrated would have required knowledge of the individual software packages. The point PTT was making in the quotation above was that it did not know when framing the TOR that there were 3 software applications which might require such integration.

Although the scope of TPT’s obligations is principally an issue of construction, PTT’s position finds support in the evidence of Mr McArdle. He was asked whether he agreed (in the light of the evidence of Khun Donnaya and Mr Gufler) that the TOR did not define comprehensively PTT’s requirements for integration. He gave these answers:

“A. I think the requirement for integration is implicit in the TOR, because there is a functional requirement expressed in the Terms of Reference and replied to in the technical specification that implies a level of integration. So, for example, if we look at something like reports, there is a requirement to produce a certain number of reports. Those reports need to draw their information from a variety of databases. The only person who knows at the time of the proposal how many databases and how many interfaces and, therefore, what level of integration is required is the vendor, because he is the one who is suggesting a particular solution. So it is implicit, if you like, in the request for tender that there is integration in this project or in this system that meets those requirements.

Q. I respectfully agree with you that there is a level of integration implicit in the TOR. The question is: is the TOR clear about what level of integration the client wants? And my suggestion to you is that it is not clear from the TOR what level of integration the client wants. Do you agree?

A. The TOR is about what functions the client wants. The level of integration that is necessary to meet those functions is a job for the vendor, because he knows, the vendor knows, what his software comprises of and what level of integration is necessary. It is a bit like saying, I guess, if I went out with a specification for a car and said, "I want you to provide me with a car", I wouldn't expect then to be provided with a kit of parts and a set of nuts and bolts, I would be expecting a consistent whole that met my overall requirement, whether I said it needed to be or not.”

That evidence, in my view, was clear and persuasive and accorded with common sense.

Indeed, Mr Look, when he came to consider this issue in his second report, expressed the view only that CR/VO integration was out of scope and implicitly accepted that all other integration was within scope. In any event, PTT dispute the contention that CR/VO integration was out of scope. The TOR provided a list of functional requirements (nos. 476 to 496) in relation to credit risk. Neither the bid nor the Technical Document (Clarification) qualified TPT’s agreement to provide the required functionality in what I might call the unified CTRM system: there was no discrete reference to CR and its integration and no limitation to that integration with CXL.

The evidence of Mr Gufler that TPT relied on was characterised as an acceptance that the TOR did not contain “the best wording”. That expression came to be used in evidence in this way. In the course of the technical clarification process, TPT had said that “integration requirements detailed in the TOR” would be met. Mr Gufler raised that wording with Khun Donnaya pointing out that there were no specific integration requirements in the TOR. Khun Donnaya’s response was to ask TPT to confirm rewording and she suggested “Customisation and integration to meet PTT’s requirements detailed in TOR will be fully met within the costs provided.” Mr Gufler was then asked how that response would help the absence of particularity and replied that “I would say that the wording is not the best wording for that”. He went on to give this explanation:

“Well, it mentioned TOR and, as I said, we wanted one single application. If we talk about integration, we want to make sure in the TOR, but it is not in the TOR covered in terms of integration is between VO and CXL… because SAP integration is covered …. It is not the best wording I agree but at the end of the day we were looking for one system.”

In my view, Mr Gufler was not accepting that the TOR was poorly worded but rather recognising where it did not specify integration because it catered for a single system not a system provided from multiple modules. If one looks at that in terms of “specification risk”, the risk lay with TPT who undertook to provide the CTRM system through those 3 systems.

The various attempts to get agreement from PTT’s witnesses as to the inadequacy of the TOR (particularly in specification of integration), and the questions posed to Dr McArdle in the basis of the evidence given, were brave attempts to establish broad criticisms from isolated and non-specific comments and pointed to the lack of substance in TPT’s case.

In my judgment, the TOR required the functionality specified and to the extent that that required integration of any of the component modules, that was within the scope of TPT’s obligations. It TPT had wanted to limit functionality to that provided by one of the modules, it should have qualified its bid and clarifications accordingly and, in my view, it did not. More specifically, the required integration of the CTRM system with SAP required integration of CXL and VO as necessary; the integration of CXL and VO was expressly identified in the Technical Document (Clarification) and was implicit in any event (as was the integration of VO and CR).

TPT argues that the impact of the inadequate TOR can be seen through the process involved in the production of the GAP lists. Gaps which were “within scope” (that is, within the scope of TPT’s contractual obligations) were matters where there was a gap between the required functionality and the software. Because that gap was within scope, it would be required to be bridged (by customisation and code change as necessary) within the contract price and within the contract period. Gaps which were out of scope fell into a different category because they would require further work to be done by agreement or by operation of the change procedure in the contract.

TPT’s case was a general case that the gap lists evidenced PTT’s additional requirements and scope creep in the project. To some extent at least this case must fall away in the light of my rejection of TPT’s case as to its limited obligations in respect of integration but it is not possible for me, on the evidence before me, to identify which gaps (whether as identified by the parties or by Mr Look) are affected by this decision.

Leaving this issue to one side, I am not, in any event, persuaded that either the scope of the gap lists or the time taken to agree them establishes any failing in specification on PTT’s part or any other breach of the implied term as to co-operation. There was agreement that some gaps were “out of scope” but that, in itself, does not establish any breach.

The final gap list, on which Mr Look’s evidence focussed, was that agreed by the parties on 5 March 2014. That identified and categorised 280 gaps: 91 gaps were in scope; 48 out of scope; 53 cancelled; and 88 were for “deferred discussion”. Mr Gufler gave evidence in his statement as to the unresolved gaps and his explanation as to why they were in scope none of which was challenged with him.

Mr Look said firstly that if there were numerous gaps, they would inevitably have an effect on progress. He then estimated the resource that would be required to fill the gaps. The first point was, as Mr Howells QC, put it a hypothesis. It was what Mr Look thought was likely to happen and to have happened but he had carried out no kind of analysis of the impact of gaps and any delay actually caused. In the absence of such an analysis, his evidence was little more than a generalised statement that if there was a lot of work to do it might take longer. The second point was also irrelevant. The gaps that had not been filled would require work to be done but the issue in this case was not what resource would have been needed in the future but what had caused delay to the date when TPT ceased work or to the date of termination. Mr Look’s evidence did not assist on this issue at all.

In any event, in terms of time taken either to identify gaps or future resource to bridge them, in my judgement only “out of scope” gaps could be relevant to TPT’s case on delay and/or the failure of the project. In scope gaps were part of the project. Mr Novobranec accepted that the list was not and could not be closed until issues relating to CXL and VO invoicing and the VO-SAP interface were resolved and Mr Olsen’s evidence was that this work was continuing into April 2014 (beyond the date of the final list).

A large part of Mr Look’s report was, therefore, devoted to analysis of the gaps and the offering of an opinion as to whether they were in scope or not. By 5 March 2014, the parties had placed the gaps into categories. Mr Look’s report did not take account of the cancelled gaps. He also opened up the parties’ categorisation and, in doing so, reclassified over half of the in scope gaps as out of scope.

At the time, TPT had no incentive to agree that things were in scope when they were not and, with PTT, were surely best placed to determine what was in scope or not. It is conceivable that there could be one or more instances where both parties fell into error but I cannot accept that they both misjudged the position to the extent that Mr Look opines. Mr Look’s only suggestion as to how the parties could have gone so far wrong was that TPT may have been being more flexible in the interests of allowing the project to progress. However, he agreed later in his evidence that those best placed to decide what was in or out of scope were those involved in the project, yet he still paid scant attention to the contemporaneous categorisation or to Mr Gufler’s evidence about unresolved issues.

I cannot accept his evidence on this matter and I prefer the evidence as to the contemporaneous categorisation of gaps in and out of scope. Without any further analysis of the impact of the analysis and identification of out of scope gaps, I am left, as I have observed before, with an overall impression of the project and that impression is not that the delay and failure of the project was attributable to an inadequate TOR or the resultant activity in analysing and identifying gaps.

I have already said that TPT relies on the case of Anglo Group plc and Winther Brown in support of the contention that the duty of co-operation in a software implementation project extends to the customer accepting reasonable solutions to problems that have arisen.

This was not a case where such a problem has arisen. Rather what was happening was that TPT was unable or unwilling to provide the functionality specified in the TOR, in particular, because it had chosen to implement the project by providing 3 software packages. In any event, I formed the firm view during the trial that TPT’s focus was on providing productised integration only and “solutions” that could be productised (in the sense that they could be incorporated into the standard software) and on persuading PTT to accept what was on offer, even if it was not what PTT wanted. The specific examples I refer to below illustrate the point.

Irrespective of any contractual issues, it is indisputable that some level of integration between CXL and VO was required. Consideration of TPT’s progress on this aspect of the project demonstrates a reluctance to engage and a desire to put off customised integration in favour of waiting for productised integration.

The story started at the “kick off” meeting on 22 April 2013. It was followed by an e-mail from Khun Chanettee to Ashwin Save at TPT stating that they had been told that there was no integration between CXL and VO. When Mr Olsen, who had been at the meeting and was copied in to the e-mail, was asked about this in cross-examination, he explained that TPT had provided custom integration for other customers but that he was talking about productised integration, that is functionality built into the standard product. He said that productised integration was to come later and he did not know if it was to be used by PTT.

Thereafter, internal discussion continued. Mr Olsen’s evidence was that by May, TPT were working on what to present or implement for PTT but had not “landed” what the final solution should be. TPT were not sure that productised integration would be finished in time for PTT’s “go live” date.

On 29 May 2013 Mr Save (who did not give evidence) made a presentation to PTT which included reference to the productised integration and was geared towards persuading PTT to wait for this integration. By August 2013 when Mr Save made a further presentation, it appears that TPT had recognised that some customised solution would be necessary pending the productised solution but wished to encourage PTT to accept a solution that was consistent with a proposed future productised version. Internally, TPT were also aware, as Mr Olsen confirmed that, for whatever reason, even the first phase of that productised integration was slipping in time.

From about October 2013, a discussion began within TPT about push backs – that is gap items they wished to persuade PTT not to have. One particular example was canvassed in the evidence relating to the means of calculating the price for bunkers. TPT’s standard system calculated bunkers on a first in/ first out basis, whereas PTT’s practice was to use a weighted average calculation. Mr Olsen sought to present this as TPT simply proposing the use of an industry standard rather than pushing back on items that would take time to develop. My view, however, is that what TPT were doing was seeking to push back on items because, as a number of the witnesses accepted, the project was already behind.

There was a telling e-mail from Mr Save on 11 November 2013: with regard to KBRs, he identified 5 (of 10) requirements relating to the CXL-VO interface which were not met on the standard product integration and were “highly custom”. He recommended pushing back on them.

There was no evidence that by this time, on indeed subsequently, TPT had started any work on any customised integration. It was no answer to say that the technical development stage had not yet been reached: the experts were agreed that an assessment of technical details by a software architect should be undertaken before preparing business blueprints.

Increasingly, as time went on, TPT’s focus came to be on persuading PTT to accept their productised integration only. Mr Olsen suggested, somewhat perversely, that as the project was delayed so it became less of an issue to wait for the productised integration.

As mentioned above, by March 2014, and with the project well behind schedule, a series of meetings was planned in PTT’s Singapore office. Around the same time, TPT embarked on a “bucketing” exercise in which the identified gaps and enhancements were put into different buckets: “core to our internal road map”; “speculative to our internal road map and worth doing”; “bespoke to PTT and not useful to our current road map”. I have no doubt that the aim of that exercise was to identify what TPT would seek to persuade PTT to do without, accepting productised integration only.

By the time the meetings took place, and TPT proposed phased implementation, the proposal was for CXL and VO as standalone applications with no integration: integration would come when the products were upgraded.

A specific instance of this failure to address integration between CXL and VO was that relating to invoicing. The TOR set out invoicing requirements - TPT relies on the fact that there was no specification of invoicing as if from one system but that again is a function of the fact that PTT was seeking to procure a CTRM system and not distinct commodities trading and chartering systems. Perversely, TPT also relies on the evidence of Khun Chanettee that the absence of a “one system” requirements is consistent with the functionality that PTT already had which, it is said, required PTT personnel to invoice from different systems. Her statement, in fact, recites that PTT group issue tax invoices from the SAP system “although trading users of the legacy TCS system issue tax invoices from TCS.” The implication of her statement is that the new system was intended to replace rather than replicate this legacy position.

By July 2013, PTT had, as Khun Chanettee said, reluctantly agreed to accept invoicing in two different systems (CXL and VO) but other invoicing issues in both systems continued to trouble the progress of the project. PTT’s witnesses gave evidence of a history of failure to resolve these issues on which they were not seriously challenged. One of the significant consequences of the absence of an invoicing solution was to delay the production of the VO TO BE document. Mr Olsen accepted that work on the VO TO BE document was put to one side in January 2013 while invoicing issues were discussed. It was put to him that that explained a hiatus in work from 28 November 2013 to 26 March 2014 and he agreed, at least, that it was a major contributor.

As I have set out above, the Contract clearly required integration of both CXL and VO with SAP. Up until March 2014, TPT’s Project Weekly Reports repeatedly contained an item “VO-SAP interface discussion, planned for next week” at which point the reports started to record that TPT was discussing “the architecture and approach”. Both Mr Olsen and Mr Novobranec agreed that the incomplete work on identifying these interfaces (particularly relating to invoicing) was one of the main reasons the Gap list could not be closed.

I record that there were other specific issues addressed by the evidence (and reflecting the list of PTT’s complaints in paragraph 126 above) including Crystal Reports and Loadrunner. As I observed in the course of the trial, they received only a passing mention, although they were then addressed in submissions, but given the views I have formed about TPT’s performance generally, it is not necessary for me to address these additional matters.

I shall endeavour to take the evidence about these matters in broadly chronological order. At the outset of the project there was a Project Plan (and a Phase II Plan). There was essentially no factual evidence about these plans but they were considered by PTT’s expert and the following criticisms identified:

As PTT rightly say in their submissions, Dr McArdle’s evidence on this was not challenged. Mr Look had not carried out any detailed analysis but he identified some concerns with the quality of the plans (no time for a scoping phase; a short period for business process analysis; and a “lean” testing approach).

There was further, no proper updating of the Project Plan during the life of the project. At best, there was a draft produced on 21 September 2013 which was re-dated to 21 March 2014 (and called the revised Project Plan).

It is, I should have thought, self-evident that any complex project running over a period of more than a year requires planning - and realistic planning at that – and a regular process of updating. Nonetheless the absence of an adequate plan or updates does not in and of itself cause delay. But, in this case, firstly, the absence of a plan which took any account of the integration activities seems to me to underline the fact that TPT had failed to appreciate the importance of these activities. Secondly, the criticisms of the Project Plan very much chime with what happened as the project progressed.

I turn next to the question of resourcing. TPT called two witnesses who were in a position to give some evidence about the resourcing issues raised by PTT, Mr Woods and Mr Novobranec, albeit neither had been involved in the initial planning. Mr Woods, who gave evidence first, described himself as being on the commercial side of the business rather than being concerned with the day-to-day resourcing of the project. However, Mr Woods accepted that when complaints were made about such matters they were “escalated” to him.

Mr Woods accepted that almost from the outset of the project, there were complaints from PTT about the absence of a Project Manager which were escalated to him. Around the same time, there was also discussion about the provision of an integration manager, a role later taken by Ashwin Save. There were complaints from PTT about the document templates produced by Abhishek Singh who, at the time, was also lead consultant for CXL.

By May 2013 there was still no dedicated Project Manager: Rajneesh Singh, was not appointed as Project Manager until July 2013. Nor during this period had TPT provided the SMEs (subject matter experts) that they had undertaken to provide and complaints about the absence of SMEs continued until late June. It was the view of PTT’s witnesses (including Khun Jittipan and Khun Chanettee) that this led to a lack of input to the business blueprint work on issues of invoicing functionality. There was no challenge to this evidence and, indeed, Mr Look agreed that the deployment of SMEs in July 2013 was too late.

To the extent that Mr Woods was able to address these matters, his statement was, as I have observed, based on the identification of apparently “helpful” documents. In the result, his statement gave a slanted impression of what had happened on the project and, when Mr Woods was asked about PTT’s complaints, he was unable to recall anything about what he had known or done. What he was certainly unable to do was offer any evidence that PTT’s concerns were unfounded. Instead he sought to evade any complaints. For example, in the face of clear evidence that there was no Project Manager until July 2013 he tried to describe Mr Ashwin Save (ultimately appointed as integration manager) as managing the project. In the face of the complaint about the absence of SMEs he identified Lance Frogtman as an SME in oil trading having moments earlier agreed that Mr Frogtman was acting as consultant on credit risk.

I recognise that it does not inevitably follow that the absence of someone called the Project Manager causes difficulties and delays and that PTT’s case does not involve identifying particular failures or delays caused by the absence of a Project Manager or SMEs. However, from the evidence as a whole, it seems to me that the project got off to a thoroughly shaky start and that that was recognised by TPT both in the escalation of issues and the bringing in of Mr Novobranec. In my judgment, the failure to put in place the appropriate people from the outset, including someone with a firm grip on the project and fulfilling the Project Manager role set out in the TOR, had a negative effect on the progress of the project. Other than its criticisms of PTT, TPT offered no substantive defence to these matters.

One further discrete complaint that PTT makes about the resourcing of the project is the absence from the outset of a software architect.

TPT argues that a software architect was not necessary on this project (or at this stage). However, it appears to have been common ground between Mr Look and Dr McArdle that on a project that involves integration of software applications an architect should be involved from the outset. Given this common ground, it is hard to escape the conclusion that TPT’s failure to appoint such a specialist fell below the standard of care and skill to be expected and that it in all probability contributed to the problems with integration which I have already addressed.

More generally, Mr Novobranec’s involvement was of particular relevance to PTT’s complaints about resourcing and approach. As part of his review in July 2013, he addressed the methodology which TPT was adopting. The TOR item 609 required “Utilization of modern methods of development theory in system development (not the traditional Waterfall model)”. I would describe the waterfall approach as a methodology in which one activity or phase is completed before another is started. In its Technical Document Submission, TPT said that it used “an approach to customer driven development that takes elements of Rapid Application Development ‘(RAD)’ and Agile development to facilitate an efficient and customercentric process.”

In August 2013, however, Mr Novobranec proposed a change to a waterfall methodology. He did so because he considered that TPT had failed to follow any plan or defined methodology and that he considered this was “killing” the project. This was a frank assessment and whilst his statement sought to put a favourable spin on this, in the witness box he accepted his assessment. In relation to this presentation, he agreed that he needed TPT to commit resources to “get our house… in order” and progress key technical issues including integration and invoicing. Despite his efforts, there is no evidence that further resources were committed and his timelines were not kept to.

Mr Novobranec then produced the revised plan in September 2013 and an Action Plan in November 2013. In his evidence he suggested that this proposed a phased implementation approach and in cross-examination he accepted that this would form part of the commercial strategy (not in fact implemented until March 2014) to persuade PTT not to pursue some Gaps on the basis of the time that it would take to complete the project:

By the time of the presentations on 4 March 2014, TPT’s position was that a waterfall approach had caused delay and that a phased approach should be adopted and the waterfall methodology abandoned.

It was the opinion of Dr McArdle, on behalf of PTT, that the failure to define and follow a clear methodology itself fell below industry standards. I accept that. The factual evidence portrays TPT as setting about the project in an unplanned and unstructured manner. It is difficult to discern what if any methodology was being pursued and, in any event, TPT more than once proposed (and perhaps implemented) a change in approach. It is not, I think, on the evidence possible to identify particular failings that followed from that but it seems to be to have been part of or indicative of the inadequate project management and planning of which PTT complain.

Irrespective of the issue of methodology, what the progress leading towards the proposal of phased implementation, and indeed the prior internal process of trying to identify what PTT would be encouraged to give up, demonstrated was that the project had got away from TPT – it was significantly in delay and, on the face of it, that was the contractual responsibility of TPT.

I referred in paragraphs 122 to 124 above to TPT’s case that PTT’s approach to the project was also the cause of TPT’s woes and the failure of the project.

TPT identified the following aspects of PTT’s working practices as material:

There is a complete mismatch in the parties’ cases on the first of these issues. PTT takes TPT’s complaint as being about dedicated business users and points to a substantial body of evidence that there were such dedicated business users identified and in attendance at meetings. TPT’s case focusses instead on Super Users as defined in the Contract. It is not in dispute that there were no Super Users designated as such albeit PTT maintains that the contractual role identified for them was fulfilled and TPT did not identify any instance of the impact of the absence of a Super User.

The complaint that there were overly large meetings followed from the complaint about the absence of dedicated business users and/or superusers. There was in my view a paucity of evidence of overly large meetings and their impact. One meeting was identified on 27 June 2013 at which there were 28 attendees, 7 representing user groups. Another example put to Khun Jittipan transpired to be a demonstration; another involved e-mails about the organisation of meetings.

It seems to me, as with the complaints about TPT’s resourcing of the project, that the crux of the issue lies not in the existence of someone with a particular title or in the number of people at a particular meeting but in whether PTT somehow hindered TPT in performing its obligations, whether because of the absence of someone to provide feedback or because of how that feedback was provided. This to some extent again is a matter of impression and I am unable to conclude that TPT’s complaints are either well-founded or had any substantial impact.

TPT, however, relied on two particular illustrative examples. The first related to the VO-TO-BE document and I have addressed above the causes of the delay in the production of this document.

The second was the CXL-09 TO-BE document relating to back office functions. The sequence of events was put in some degree of detail to Khun Taveesuk and I summarise it below. Despite Khun Chanettee’s involvement in these events and exchanges, she was asked very little about it in cross-examination.

I do not regard this as by any means an easy example by which to judge TPT’s case as to what they describe as PTT’s iterative approach to feedback or from which to make any more general assessment of PTT’s working practices. It provides some support to TPT’s case that, in this instance, PTT introduced requirements as they went along, particularly towards the end of the period I have considered above. The difficulty with the inference TPT ask me draw is, firstly, that in a process driven project such as this, there will inevitably be some to-ing and fro-ing and, as I said at paragraph 124 above, that it is almost inevitable that there will be some occasions when there is something to criticise there. What can be seen in the exchanges I have set out above is that there was an ongoing process of documents being sent to PTT for comment which in many instances resulted in prompt responses which were quickly, and I infer easily, taken on board. I can accept that PTT’s performance in respect of this particular TO-BE document left something to be desired and may well have been frustrating for TPT towards the end but I cannot infer from this example some wholescale lack of co-operation that explains away the significant delay on this project.

In any event, I raised with the parties the points that on both parties’ cases, this project involved a degree of exchange and iteration. In the context of the alleged breach of the implied term as to co-operation that raised the issue of where the line was crossed between, as I put it, the inevitable to-ing and fro-ing between the parties and into breach. In response TPT identified 4 examples of what crossed the line:

These examples seem to me to illustrate the difficulty in identifying what crosses the line and the weakness of TPT’s case that PTT did so on any systemic basis.

TPT’s progress on this project was slow – milestones were not achieved and by the time of termination, there was no realistic prospect of completion within 460 days or in accordance with the revised programme.

A major cause of that delay was TPT’s failure to address the issues of software integration referred to above. I find that there was, on TPT’s part, a lack of willingness to address these issues and a lack of resources to do so. And I find that TPT were in breach of contract in the respects relied upon by PTT in issue no. 5b.

As I said earlier in this judgment, there may well have been occasions on which PTT did not perform to some standard of the perfect client but it was not the alleged inadequacy of the TOR or PTT’s failure to co-operate that had brought the project to this position.

My conclusions on issue no. 5 are therefore that the delay to and/or ultimate failure of the project was not caused by the matters relied on by TPT in issue no. 5a but by the matters relied on by PTT in issue no. 5b.

I set out above the issue which the parties had agreed as to what was broadly called “suspension”. This is a slightly odd issue in the sense that it is not immediately apparent from the issue where it fits in to the dispute, not least because of its location in the list of issues. It, therefore, seems to me necessary to examine how the issue emerged from the pleadings.

In the Amended Particulars of Claim, it appeared as a sub-heading under the heading “The Defendant’s CTRM Notices were wrongful”. It was alleged that after April 2013, the parties had entered into an express and/or implied agreement (whether by way of variation of the CTRM Contract or collateral or supplemental agreement) to the effect that:

In support of this alleged agreement, TPT relied firstly on the facts and matters in specified paragraphs of the Amended Reply and Defence to Counterclaim. At the risk of apparent repetition, these paragraphs included the following:

“In the period from April 2013 to May 2014, TPT continued to work on the implementation of the CTRM System, albeit that this was in the context of ongoing discussion between the parties about the scope and work required for that implementation. In so far as necessary, TPT will rely on the fact that the parties expressly and/or impliedly agreed (whether by way of variation of the CTRM Contract or collateral or supplemental agreement) that, during this period, (i) the timeframes for completion of phases of the CTRM Contract were suspended; (ii) the Implementation Services for the CTRM System were subject to further negotiation and agreement between the parties; and (iii) that the CTRM Contract did not therefore contain the agreed scope of the Implementation Services.”

It, therefore, appeared to be TPT’s case that from the outset of the project it had no obligations to perform within the timeframes in the CTRM Contract. Such a case makes no sense and it gives the lie to the “agreement” for which TPT contends.

TPT’s pleaded case went on to rely on the matters set out in the following paragraphs:

I have set out how TPT put its case at some length for the following reasons. Firstly it appears that, as pleaded, this case as to “suspension” of obligations was directed at the allegations of breach leading to termination. It does not seem to have had anything to do with the delay allegations. It was not until TPT’s opening submissions at trial that “suspension” was related to the delay case. Secondly, and with respect, it does not, even at face value (whether on the pleadings or taking account of matters relied on at trial), come close to establishing an express or implied agreement either to suspend the timeframes for the performance of the CTRM Contract or to the effect that the scope of the CTRM Contract was somehow now up in the air.

In fact, as I have already found, what was happening was that TPT, having fallen behind had sought to persuade PTT to reduce their expectations from the CTRM Contract, not least by emphasising to them the potential delay and proposing their phased approach. To have sought to portray this as some kind of mutual discussion of revised scope seems to me to have been misleading. If anything, PTT’s discussions with TPT about how to get the project back on track seem to me to be the very sort of co-operation which TPT say the nature of the contract called for.

Further, TPT’s case on this alleged agreement was muddled up with its case that it was not obliged to perform unless PTT paid its invoices rendered under the Order Forms. These two cases are inconsistent: one relies on an alleged mutual agreement; the other on the exercise of an existing contractual right (albeit one that I have rejected).

There was no evidence beyond the documents and assertions pleaded to support TPT’s case as to the alleged agreement. It was put to Khun Donnaya in cross-examination as follows:

“Q. My suggestion to you is that the effect of the negotiations, and the stance adopted by the parties, was that there was a suspension of the contractual obligations whilst a variation was being discussed, negotiated and ideally agreed.

A: (uninterpreted) There was no agreement to suspend the contract. I mean, we expect Triple Point to continue working on the project, but keep – in parallel keep updating the project to – the project plan to be more realistic. We do not expect Triple Point to stop working on the project.”

She thus denied expressly that there was any agreement to stop work and, it seems to me, implicitly that there was any agreement to suspend the timeframes: PTT wanted a more realistic project plan for PTT to work to but that was all. It does not amount, as TPT argued, to a tacit acceptance either that the parties would continue to negotiate over applicable timelines or that they were ad idem that the 460 day timeline was not applicable. Khun Donnaya was a credible witness and straightforward in her answers. There was nothing that makes me doubt her evidence on this point.

I reject TPT’s case as set out in issue no. 6 and I find that there was no such agreement as alleged. It follows (i) there was no agreement that (as I assume to form part of TPT’s case) there were no agreed periods for performance and (ii) that the alleged agreement does not render the termination notices wrongful.

This is again a slightly odd issue in that, in the agreed list, it appears as a free-standing issue with no linkage to any other issue that arises. Along with the alleged agreement to suspend performance, however, it appeared as a pleaded allegation, under the heading “The Defendant’s CTRM Notices were wrongful”, as one of the two key reasons why work had not progressed as originally envisaged. More particularly it was said that it “had the effect of suspending the parties’ respective obligations under the CTRM Contract during the period of force majeure” which again appeared to go to TPT’s case that PTT had wrongfully terminated the contract.

What is not in dispute between the parties is that there was civil unrest in Thailand between November 2013 and (on PTT’s case) March 2014 or (on TPT’s case) May 2014. There is also no dispute, as I see it, that that such civil unrest would constitute force majeure as defined (by reference to Thai law) under the Contract. What is in issue is whether this had any impact on the project at all.

TPT’s case was that the civil unrest had a direct impact on the ability of its staff to work in Bangkok (and Thailand generally) particularly in the first few months of 2014. TPT also said that this was the subject of extensive correspondence between the parties culminating in an e-mail from PTT dated 4 April 2014 in which PTT confirmed that it had at a recent meeting informed TPT that “we need to extend the contract due to the political situation in Bangkok”. In its Opening Submissions, TPT said that “the extent to which particular events prevented TPT from progressing with the project will be explored in oral evidence.”

TPT’s evidence was given in a few paragraphs of the statements of Mr Novobranec, Mr Woods and Mr Olsen all of whom largely recited the documents. PTT’s evidence was given in the witness statement of Khun Yingyong.

The evidence before me amounted to this:

I accept that these matters must have had some disruptive effect up until the end of the period of the declared state of emergency, although there was no substantial evidence from TPT as to what that effect was. The promise to explore this in oral evidence was unfulfilled. There was no evidence that any event of force majeure, and any impact, continued into May 2014.

Nonetheless, at the time TPT sought and PTT apparently agreed an extension of time of 90 days in respect of force majeure. On 24 January 2014, TPT, referring to the state of civil unrest, gave notice to PTT “of force majeure pursuant to Article 16”. By letter dated 10 April 2014, TPT recorded that for the reasons discussed at a meeting on 27 March 2014, including force majeure, TPT would not be able to complete within 460 days but that the parties had agreed a 90 day extension.

The express terms of Article 16 are important. Article 16.1 provides that if either party is rendered unable in whole or in part to comply with any obligation by reason of force majeure, upon giving notice and full particulars, such obligation shall be suspended during the continuance of the inability so caused and the party shall be relieved of liability for failure to perform the obligation during that period:

TPT’s approach, however, has been to rely on the Thai civil unrest far more generally as suspending any obligation to perform, although in fact TPT continued to work on the project.

Having said that, the agreement that there should be a 90 day extension of time in respect of force majeure lends some weight to the argument that there must have been a period when TPT was unable to perform. However, that argument is not supported by the evidence. Mr Woods agreed that a 90 day extension was discussed; that that was being treated as a period which would allow TPT to take forward its proposals for a phased approach; and that it was convenient for PTT to link it to the requests made for an extension of time for force majeure. Mr Novobranec’s evidence was that he was sure that force majeure “may have been one of the reasons we asked for [the 90 day extension]”. It was put to him that the parties had agreed to call the 90 day extension one for force majeure although it was not. His response was that he could not be sure.

In cross-examination, Khun Donnaya said that PTT was asking TPT to update the project plan and that extending for 90 days was a compromise agreement with TPT: “we extend another 90 days and maybe we used the reason of ….. the unrest in Thailand”. There was therefore some commonality of evidence on both sides that the 90 days was simply as a matter of convenience attributed to the civil unrest and no more. There was no evidence to the contrary and certainly no positive evidence that the 90 days related to the civil unrest or how it did so. PTT sought to have that agreement finalised by a variation to the Contract but that did not happen. TPT declined to enter into any amendment to the CTRM Contract until its invoices for software licences were paid (as set out in the e-mail of Mr Walsh of TPT to PTT on 27 May 2014). In other words, the putative agreement did not reflect the fact that, or a common understanding that, the 90 days was related to the force majeure event.

I am drawn to the conclusion that it is simply not possible for me to say that the civil unrest caused TPT to be unable to perform any of its obligations with a consequent suspension of the obligation to perform during any period of unrest and certainly not the entire period from November 2013 to May 2014. Even if I had reached a different conclusion – for example that there was a period of 90 days when TPT was unable to perform – that would still beg the question of the impact on that conclusion on the termination notices served.

I therefore answer the question in issue no. 7 in the negative.

I approach these issues by looking firstly at how the parties put their respective cases (from which they identified the agreed issues).

PTT’s case is in one sense straightforward. On 5 September 2014, PTT wrote a letter to TPT headed “Notice to remedy breach of Contract for Commodity Trading & Risk Management System”. The letter expressed PTT’s concern that TPT was in breach including that it had not attended to the project since May 2014. PTT proposed a without prejudice meeting “to discuss any issues that are preventing the progress of the Project” but “in the interests of open discussion” informed TPT that it was considering whether to terminate the Contract.” It is a moot point whether this was a contractual notice or not. PTT contend that, despite its heading, it was not and I agree but it put TPT on notice of PTT’s intentions. It is common ground that it was followed by some without prejudice discussions.

By letter dated 16 February 2015 and similarly headed, PTT set out in broad terms the respects in which it considered TPT to be in breach. The letter said the following

“By this letter PTT notifies TPT pursuant to Article 15.3.1 that in PTT’s opinion TPT has not exercised the professional skill and care to be expected of TPT under the terms of the Contract ….. in accordance with Article 15.3.1, should TPT fail to satisfy PTT within 30 (thirty) calendar days from the date of receiving this written notice PTT will be entitled to terminate the Contract.

…

By reason of the breaches of Contract in paragraphs 6 and 7 above PTT is entitled to and hereby gives TPT notice pursuant to Article 15.7.1 that all of the breaches set out at paragraphs 6 and 7 above are failure to comply with fundamental conditions of the Contract within the meaning of Article 15.7.1. PTT gives notice and requires TPT to remedy all breaches within 15 Working Days. This notification is in addition to and without prejudice to PTT’s notice under 15.3.1 above.”

By letter dated 23 March 2015, PTT then terminated the Contract. PTT referred to its letter dated 16 February 2016 and the failure of TPT to remedy the alleged breaches and stated both that it terminated the Contract under Article 15.3.1 and 15.7.1. The letter continued:

“Further, and without prejudice to PTT’s termination of the Contract pursuant to Article 15.3.1 and/or 15.7.1, the breaches of contact set out in the Notice …. were fundamental and/or were such as to deprive the PTT of substantially the whole benefit of the Contract in that (as set out in the Notice) as a result of TPT’s breaches of Contract PTT is unable to utilise the CTRM software for the purpose of commodities trading and risk management. Consequently PTT continues to suffer loss, the extent of which is not yet fully known or quantified.”

PTT’s case is that these notices were validly given and that it terminated the Contract under Article 15.3.1 and/or 15.7.1 and/or by the acceptance of a repudiatory breach of Contract. In light of my decisions on the issues of breach as to TPT’s failure to exercise the professional skill and care to be expected, and subject to consideration of TPT’s case, it is self-evident that I would find that PTT was entitled to terminate pursuant to Article 15.3.1.

The view that I would take of Article 15.7.1 is less obvious. The right to terminate under this clause is framed not in terms of “fundamental breach” as PTT’s termination notice implies but rather in terms of breach of “any fundamental condition”. There was little, if any, argument before me as to the meaning and application of this provision but it seems to me that it cannot encompass the obligation to exercise reasonable skill and care since termination on that basis is expressly provided for in Article 15.3.1. However, the obligation to perform must be a fundamental condition and since May 2014, TPT had wholly ceased to perform. On that basis, and again subject to TPT’s defence, I would find that PTT was entitled to terminate on this basis. For the same reason, TPT’s failure to perform would be a repudiatory breach of contract which PTT was entitled to accept and did accept by its letter of 23 March 2015.

TPT’s primary case on termination is that it was PTT which wrongfully terminated and repudiated the CTRM contract and that that repudiation was accepted by TPT in its Reply and Defence to Counterclaim. For the alleged repudiation, TPT relies on the very correspondence set out at paragraphs 224 to 226 above.

On any view that is an unusual case: it involves the proposition that the CTRM contract, in fact, continued to exist until the service of the Reply and Defence to Counterclaim on 9 July 2015 and implicitly, though not expressly, that TPT was somehow relieved from performance during that period.

It is of some relevance to observe that this is an area of TPT’s case where the ground has shifted significantly during the course of the proceedings. As pleaded, TPT’s case was that these notices were wrongful because PTT was aware (i) that the project had not progressed because there was an agreement to suspend the project timeframes and (ii) there was force majeure resulting from civil unrest in Bangkok. Neither of those contentions made any sense. The first was the suspension argument: even if had been agreement to “suspend the project timeframes” that would, at most, amount to an agreement that there was no completion date or that time was at large. It would not excuse complete non-performance. The effect of any force majeure event would similarly be, at best, a reason to suspend the obligation to perform for the period of inability to perform and not a reason to cease work.

Further, the September letter asked TPT to discuss remedying breach and the February notice required TPT to remedy a breach – that is to perform the contract.

Perhaps recognising all those difficulties, by the time the matter came to trial, TPT’s case had shifted. TPT now seeks to set those notices against the background that, they say, PTT had already decided in May 2014 to terminate the contract and in June 2014 told TPT that “the matter” – “the matter” referring to Mr Walsh’s e-mail dated 27 May 2014 - had been “forwarded” to the legal department. Further, TPT relies on the fact that it emerged that in May 2014, PTT had redeployed 3 servers on which the software was held, making it clear, on TPT’s case that PTT did not intend to proceed with the contract and/or making it impossible for TPT to proceed.

Against that background, it was argued that:

I assume – because it seems to me a necessary element of TPT’s case – that TPT’s argument is that the notices thus evinced an intention to terminate when PTT was not entitled to do so.

The fact that this alleged repudiation was not accepted until service of the Reply and Defence to Counterclaim in this action is a strong indicator that this aspect of TPT’s case is an afterthought and presumably one intended to meet the difficulty that TPT faces having ceased work. Even more belatedly, TPT in closing submissions suggested that the refusal to continue work was an unequivocal acceptance of a repudiatory breach. I also asked whether the breach of the implied term as to co-operation was relied on only defensively. I was told that it was. Nonetheless in closing submissions TPT then appeared to advance an alternative case that PTT’s breach of this term was repudiatory and, presumably, accepted by some means. No developed case was put forward on this basis and I reject it.

The inherent difficulty with TPT’s case on termination is this: it had stopped work effectively at latest by the end of 27 May 2014 in reliance on the failure to pay the software invoices. If it was not entitled to do so, then that failure to perform must, irrespective of any issue as to why the project was in delay, have amounted to a repudiatory breach of contract and/or a breach which entitled PTT to terminate under Article 15.3 and/or 15.7.1. This is issue no. 9.

On the evidence, I do not find that a firm decision to terminate TPT’s contract had been taken before or shortly after TPT ceased work. The redeployment of the servers loaded with TPT software is the strongest pointer that PTT had decided to terminate but it is of limited significance since it had no impact on TPT’s performance and, in any event, as Mr Novobranec accepted, the final live version of the software would have been different.

If I had concluded that PTT had already decided to terminate in May 2014, that would have made no difference. The time the intention to terminate was formed does not in itself affect the validity of the notices served. If that intention had been formed in May 2014, it had not been communicated to TPT; it provided no excuse for the cessation of work; and it cannot somehow negate the effect of the notices later served. What happened was that TPT ceased to perform and PTT required them to do so – if TPT had attempted to continue and been prevented from doing so, the legal landscape might have looked very different, but they did not. The “destruction” of the software may have posed an obstacle to continued performance in that TPT would have had to reinstall the software. But we shall never know because TPT did not respond. TPT clearly cannot say that this was because of the redeployment of the servers because that was not known about until the course of these proceedings.

My conclusions on these issues are therefore as follows:

I take issues 13 and 14 together. As such they raise the following issues:

The claims for the additional cost of the alternative system and wasted costs follow from the termination of the Contract. The CTRM Contract, however, makes no express provision for the payment of any damages or losses following termination, so the claims must, in law, be for damages for the preceding breaches which led to the termination. That is of some relevance because it is an answer to TPT’s argument that it cannot be liable for costs incurred prior to termination.

In such a case, one might have expected to see lengthy and detailed evidence about the sums claimed by way of damages but this was an unusual case in which the sum total of the evidence was that given by Khun Taveesuk in his witness statement. His evidence gave figures for costs of consultants for a new procurement, costs of the alternative system and additional costs in design development. He explained that the costs of the new system were higher than those in the CTRM contract because PTT had decided to carry out some of the design and development in house and, not being a software developer, would incur additional costs to develop source code. He gave a breakdown of the wasted costs as (i) the payment made in April 2014, (ii) cost of hardware, (iii) costs of PTT staff and consultants. He said that the staff costs were primarily claimed because traders and other staff involved in the Project had to leave their usual roles to assist the Project in areas such as requirements gathering.

His evidence made clear (which the agreed issues did not) that it was accepted that the value of the CTRM Contract (Phases I and II) should then be deducted from the sums claimed giving a total of US$10,574,756.78. The total value (including sums already paid) was deducted.

This evidence was broad brush to say the least but it was not challenged in cross-examination by TPT.

So far as the procurement of a new system was concerned, TPT instead advanced 4 arguments.

Firstly, TPT said that in house development requires huge staffing and sub-contracting arrangements because PTT does not have the requisite expertise. That seems to amount to an argument that this was an unreasonable course for PTT to take and that the costs should be irrecoverable on this basis. That argument could not relate to the whole of the costs incurred and no attempt was made by TPT to identify what was unreasonable or what would have been unreasonable.

Secondly, it is said that the new system is bespoke rather than packaged so there is no comparison of like with like. PTT’s answer to this is that this is just terminology. What TPT was to provide was its software customized to PTT’s requirements. There has been no interrogation of the extent to which the new system significantly adopts a different approach or the impact on cost.

Thirdly, in any event, PTT’s ICT staff will be gaining valuable skill, knowledge and experience in developing its in-house system and TPT should not have to pay for that. That seems to me to be another expression of the unreasonableness argument.

Finally, much of the work that was undertaken was aimed at fixing the deficiencies in the TOR and the work on the GAP list substantially continued to this betterment. This is, with respect, a somewhat confusing argument that throws different points blithely into the pot. The point about the TOR seems to amount to an argument that some of the costs have been unreasonably incurred without more – in any event, I have rejected the broad complaint about the TOR. The point about the GAP list appears to be that there is betterment in the new TOR. That is, as far as I can see, supposition. It is also, I infer, the case that TPT says that some sort of credit for betterment should be given. The evidence goes no further.

Faced with the situation that PTT’s evidence has barely been challenged other than by arguments that are not supported by any evidence, I find that PTT has made good its case that it has incurred the additional costs and is entitled, in principle, to recover the costs of the procurement of the new system less the value of the CTRM Contract.

I am unable to accept the claim for repayment of the sums paid in April 2014. Article 15.7.1 expressly provided that if PTT exercised its rights to terminate under that clause, TPT is entitled to payment (only) for Services performed up to that date. It seems to me inconsistent with that provision to then argue that the sums paid for services to the time of termination are necessarily wasted because the Contract is not completed. On the evidence that I have heard, it seems to me that some of the work done by TPT must, irrespective of the criticisms made, have had use or value not least in the activities undertaken to produce business blueprints and otherwise focus on PTT’s requirements. For both these reasons, it seems to me that PTT should, in my view, have done more to articulate and support a case that all costs had actually been wasted or as to what proportion of expenditure had been wasted. Absent anything other than the bare assertion that all monies paid were wasted, I reject this claim.

I also reject the claim for wasted PTT staff costs. With respect to him, Khun Taveesuk’s evidence is mere assertion that people were deployed because of TPT’s breaches of contract but there is not a single example to illustrate this let alone a body of evidence to back it up.

That leaves the claim for the cost of wasted hardware which is unchallenged and which I accept.

Even if PTT would otherwise be entitled to the damages set out above, the issue remains as to whether recovery is limited by the terms of Article 12.3. It is for this reason that the underlying breaches are of such significance to PTT’s claim.

TPT relies on the terms of Article 12.3 which provide that “the total liability of CONTRACTOR to PTT under the Contract shall be limited to the Contract Price received by CONTRACTOR.” Since the only sum paid was the US$ 1,038,000 paid in April 2014, that amount is the cap on damages recoverable from TPT.

However, there is an exception to this limitation: “This limitation of liability shall not apply to CONTRACTOR’s liability resulting from fraud, negligence, gross negligence or wilful misconduct of CONTRACTOR ….”. PTT’s position is that the breaches of contract which it relies upon amount to “negligence” since they are failures by TPT to exercise reasonable skill and care and its claim for damages is, therefore, outside the limitation. I infer that it is for this reason that PTT was not content to rely solely on delay or refusal to perform as giving rise to its entitlement to terminate but advanced its more complex case on performance failures.

Neither party’s case on this issue is free from difficulty. On the one hand, breach of Article 12.1 which imposes the obligation to exercise reasonable care and skill would, in common legal language, be called negligence, being a failure to exercise such care and skill. But, if the exception under Article 12.3 applies to such breaches, then the effect of the limitation is severely curtailed.

TPT argues that that cannot have been the objective intent of the clause and that “negligence” must, therefore, be given some different meaning from breach of the contractual obligation to exercise reasonable care and skill. TPT points to the fact that the term appears amongst a list of matters of greater gravity namely fraud, gross negligence and wilful misconduct.

There are two objections to this argument. Firstly, the limitation (and the exception) apply to liability under the Contract. The exception is, therefore, not apt to apply to non-contractual liability and must encompass contractual liability for “negligence”. Secondly, other than by the choice of law and jurisdiction clause, this Contract has no connection whatsoever with England and Wales and the law of this jurisdiction. So why would a non-contractual duty of care ever arise? If no such duty of care arises, there is no negligence to consider other than that arising under Article 12.1.

Both of these objections seem to me to be answered by the surrounding terms – neither fraud, gross negligence nor wilful misconduct are or are necessarily matters giving rise to liability “under the Contract”. Nor are they all matters that would give rise to a liability in English law which, for example, does not recognise a free-standing liability for wilful misconduct although the concept might be relevant in particular circumstances. Similarly “negligence” is apt to capture liability outwith the Contract.

The clause is by no means easy to construe but, in my view, and applying the principles of contractual construction which I have already recited, the parties cannot have intended to exclude from the limitation on liability the breach of the principal obligation appearing in the same clause. As TPT put it, the exception for negligence must apply to something else whether breach of a duty of care in tort (other than a concurrent duty, if one exists) or its Thai equivalent.

The claim to liquidated damages for delay arises under Article 5. I have already found that TPT was responsible for the delay that had occurred to the Project by May 2014 when it ceased to perform; it was not entitled to cease performance and was therefore responsible for any further delay up to the date of termination.

PTT’s claim is calculated as set out in Schedule 4 to the Amended Defence and Counterclaim.

TPT says that these sums are not recoverable. Firstly, TPT relies on the fact that the sums payable under Article 5 are, on their face, described as a penalty. It is trite law that a penalty is unenforceable in English law. That, in itself, rather begs the question why the term was used in a contract made subject to English law. The answer to that question, and indeed to TPT’s argument, seems to me to lie in the approach of the Courts to the language used in such clauses. In a liquidated damages clause (which uses that term) it is clear that the use of that description is not determinative and that the court may nonetheless find that the “liquidated damages” amount to a penalty. By the same token, even though the commonly used term “penalty” appears in the contract, it is open to the Court to conclude that the clause in reality sets a reasonable level of liquidated damages. In this case, that is how I construe Article 5.

Secondly, TPT argued that because the clause results in the same measure of penalty regardless of the circumstances of the delay, it results in a “penalty” out of all proportion to any legitimate interest of PTT in enforcement of the primary obligation (relying on Cavendish Square Holdings BV v Makdessi [2015] UKSC 67). That argument seems to me to be hopeless given the apparent reasonableness of the amounts specified in Article 5.

Thirdly, TPT relies on its case that delay has been caused by matters outside the control of TPT. To the extent that that depends on TPT’s case as to breach by PTT, I have already rejected that contention.

Fourthly, TPT relies on the suspension of the timeframes for performance. I have also found against TPT on that issue.

In its pleaded case, TPT took no issue on the calculation of the liquidated damages amount. That remained the position until written closing submissions when two further points were raised. TPT argued that it was wrong to calculate damages by reference to the Project Plan dated 21 September 2013 because thereafter PTT were repeatedly told that more man days were required. Despite that, the revised Project Plan was presented in March 2014 and was the same plan as advanced in September. That is why it has been used as the basis for calculation.

TPT also relied on the fact that PTT had made no allowance for force majeure or the 90 day extension of time which it was prepared to give. In the light of my conclusions in Part 6 neither of these points is well-made.

It was frankly unclear to me whether there was any issue as to whether the liquidated damages for delay were caught by the limitation of liability in Article 12.3. This was not expressly pleaded in defence by TPT nor was it relied on in in submissions in answer to the claim for liquidated damages. Nonetheless, I consider this issue since it appears to arise under agreed issues.

If Article 12.3 is taken apart, it provides as follows:

This last sentence does not sit well with the preceding sentences – it appears to make PTT’s exclusive “remedy for any claim” the remedying of the breach or the return of fees, in the face of the first sentence which provides that the Contractor is liable for any damage and the second sentence which limits the amount of damages. It makes some sense, however, if it is construed as providing that the remedy for breach is the return of fees (whatever damage is actually suffered) not to exceed the Contract Price paid (point (a)) and there is then an exception for “specific remedies expressly identified as such in this Contract” (point (b)).

Neither party has contended for (a) as the proper construction of the clause and both parties have proceeded on the basis that damages are recoverable subject to the arguments about the cap. However, PTT does argue that the exception in (b) is not merely an exception to what is recoverable (in the sense of damages rather than fees paid) but also to the limitation on liability. PTT says simply as a matter of construction that “specific remedies” are excluded from the cap. That is not what the sentence says in terms and PTT’s case seems to me, in effect, to adopt the argument at (a) because it equates what is recoverable (fees paid) with the capped amount (the Contract Price paid) subject to the exception.

Allowing for the difficulties in construing this clause, I accept PTT’s case on this point of construction. In my judgment, the clause taken as a whole provides that the damages for breach are recoverable but that they shall not exceed the sums paid. The third sentence of Article 12.3 repeats this position in a different way. In doing so, it also provides that there is an exception to the recoverability only of the fees paid and the total liability in respect of services or deliverables (which is similarly limited to the sums paid). Article 5 provides such an exception since it expressly allows the recovery of a percentage of the value of undelivered work (which by definition has not been paid for).

TPT in any event claims the sum of at least US$2,312,361.52 in respect of services provided to PTT. The primary basis for this claim was that it was the damage that TPT had suffered as a consequence of PTT’s repudiatory breach. That claim fails in the light of the decisions I have reached.

The alternative basis for this claim in law is the provisions of Article 15. In the event of termination Article 15.5 provides that if the termination is prior to a payment installment becoming due, the Contractor shall be entitled “to a fair and reasonable proportion of such payment installment (sic) based on the number of days worked since the later of (a) the Effective Date and/or (b) the date of approval of the Report.” I interpret the latter part of that clause as meaning that if termination takes place before any Milestone has been achieved, consideration must be given to the period worked since the Effective Date but if the termination takes place after a Milestone is achieved the period considered is that since the last approved Report.

As I read this provision, it applies whatever the basis for the termination. Although Article 15.7 appears later in the Article, it is already referred to in Article 15.4 as to consequences of termination. The provision in Article 15.7 that the Contractor is only entitled to payment for Services performed up to the effective date of termination serves to confirm the entitlement under Article 15.5 and to point the contrast with the fact that the Contractor has no entitlement to damages.

PTT’s first line of defence to this claim is that the provisions of Article 15.5 do not come into play on the facts of this case. TPT was paid an agreed amount for Milestones 1 and 2 but without acceptance that the milestones were complete and any approval of reports was conditional on proper completion. Therefore one never gets to the point where there is a period of further work to be considered. I find that argument difficult to accept in those terms where payment for Milestones 1 and 2 was made (as if the relevant deliverables had been approved). Nonetheless, in my view, TPT could not be entitled to payment for any work that was carried out to complete these Milestones and could only be entitled to payment for work specifically in respect of future incomplete milestones.

The principal difficulty with TPT’s claim therefore is that it is for payment based on days worked for the whole of the Project up to termination in a sum, as pleaded, of “at least US$2,312,361.52”.

Mr Woods gave some high level evidence about the efforts of TPT to get the project back on track after December 2013 but there was otherwise no factual evidence to support this case. TPT’s case thus depended on the evidence of Mr Look. He identified data which showed a total number of man days worked of 2,977 days. He then derived a “blended” day rate from the CTRM Contract, using a figure of implementation and associated costs divided by a number of planned days. The number of planned days appears to have been derived from a pre-contract assessment of 5,018 hours which on any view were underestimates. He applied that rate to the total number of days worked giving a figure of US$2.56 million. Finally, he compared that with a different basis of assessment and expressed the view, as he had been asked to do, that US$2.56m was a reasonable value of the work done.

It is not necessary for me to go into the detail of Mr Look’s approach although it was the subject of significant criticism by PTT. As I have said, the principal difficulty that TPT’s case faces is that its claim should have taken account of the payment already made for Milestones 1 and 2 and could only have been in respect of services thereafter. That is not simply a matter of giving credit for the sum paid against the total sum as TPT have implied in submissions. It is a matter of identifying the work referable to the incomplete milestones. There was no evidence on which such an assessment could be based and TPT did no more than rely in broad and general terms on its witness evidence which is said demonstrated that milestones 3 and 4 were largely complete. This provided the Court with no basis on which properly to assess any claim.

Further, in Opening Submissions, TPT said that if TPT was required to rely on the second part of Article 15.5, it was accepted that an amendment would be required to its Response to Request 39 of PTT’s Part 18 Request. This is of some importance in seeing how TPT’s case was advanced. PTT requested Further Information as to the Implementation Services alleged to have been undertaken with a value of the claimed amount including the period, staff, work undertaken and the milestones to which it was alleged the work related. TPT’s response was that the sum represented the “commercial value of the works performed on the CTRM project for the Defendant” but for which TPT had not been paid. PTT then asked how the sums was calculated with reference to the mechanism provided in Article 15.5. TPT’s response was this:

“This Request addresses the second provision of Article 15.5. the Claimant relies on the first provision of Article 15.5 which provides that in the event of termination, the Claimant is entitled to all sums due to it.”

The response, to my mind, made no sense. There are not, under Article 15.5, two distinct heads of claim. The first sentence provides that any sums that have become due under Article 18 are payable; it does not create some free-standing entitlement to payment of some undefined sum. The second sentence deals with payment for services for which payment has not yet become due under Article 18. TPT’s claim would necessarily have had to be advanced under the second part of Article 15.5. Its pleaded position and acceptance of the need to amend make it clear that no case was truly advanced on this basis. No such amendment has, in the event, been made.

In my judgment, there is no sensible basis on which the Court could assess such an (unpleaded) claim and it fails for lack of evidence. But even if such an alternative claim could be formulated and advanced, given my conclusions on the damages recoverable by PTT, it would not be of any advantage to TPT. If further sums are awarded to TPT they could and would be treated as paid. They would then increase the Contract Price paid to TPT and thus increase the cap on damages recoverable by PTT.

Issue 13 (and subject to issue no. 14):

Issue no. 14: PTT’s claim in respect of (i) and (ii) above is, however, limited by the terms of Article 12.3 to the total sum of US$1,038,000.

Issue no. 15: TPT is not entitled to recover at least the sum of US$2,312,361,52 in respect of services provided to PTT.

Issue no. 16: TPT claimed the repayment of the amount of a performance bond, provided pursuant to Article 11 and paid to PTT. TPT accepted that this issue turned on the decision as to repudiatory breach. Since I have found that PTT was not in repudiatory breach, the sum does not fall to be repaid.

Issue no. 17: TPT claimed to be entitled to an indemnity under Article 13 against claims by Accenture who acted as sub-consultants. Article 13 provided an indemnity against loss, damages liability and claims arising out of the performance of the Contract “provided that such losses, damages, liabilities and claims shall occur as a consequence of the errors, omissions, negligence or wilful misconduct of the indemnifying party”. No such basis for an indemnity arises here and TPT are not entitled to the indemnity.

Under issue no. 18, PTT sought declarations as to the meaning of Articles 15.4.2 and 15.4.4. Only the declaration in respect of Article 15.4.2 was pursued. Article 15.4.2 contains an obligation to assign rights and duties to the extent required by PTT in the event of termination. PTT’s case was that that must include an obligation to inform PTT of any rights and duties which PTT might require to be assigned.

It seems to me that PTT must be right about this. They could not require the assignment of rights and duties they did not know of. I grant a declaration in the terms that TPT is obliged to inform PTT of any rights, duties and obligations it has obtained or incurred in connection with the CTRM Contract. I do so with some reservations as I doubt that any such declaration has any practical purpose at this stage.