The Supreme Court upheld a High Court ruling that a computer-licensing agreement had not been lawfully terminated, but its judges disagreed over whether the licensor could rely on a contractual cap on damages.
The appeal arose from an interlocutory ruling in a Commercial Court case involving the European Computer Driving Licence Foundation Limited and two plaintiffs, including a company trading as ICDL Saudi Arabia. The judgment was delivered by Mr Justice Donal O’Donnell on 14 November 2012. He adopted the factual account in a separate Supreme Court judgment by Mr Justice Fennelly and referred to an earlier High Court judgment by Mr Justice Clarke.
The Foundation argued that the licensee was required to obtain consent from Saudi Arabia’s Technical and Vocational Training Corporation (TVTC) to conduct its business. It said the relevant contract clause covered commercial consent as well as legal permits. O’Donnell J rejected that interpretation, concluding that “licences, permits and consents” in the clause referred to legal authorisations. He nevertheless agreed that the evidence about Saudi law was sharply conflicting and saw no basis to overturn the trial judge’s conclusion on that issue.
He also agreed with Fennelly J that the agreement did not allow partial termination, so the purported partial termination was ineffective. The question of whether an August 2010 letter gave sufficient notice was not properly before the appeal court as a distinct ground, and did not need to be decided. The court upheld the High Court’s liability judgment on those grounds.
The judges differed on clause 25, which capped the Foundation’s damages liability at the lesser of 10 per cent of the licensee’s payments or €50,000, subject to exceptions for a “wilful act” or “gross negligence.” Fennelly J concluded that the cap did not apply. O’Donnell J disagreed: he considered gross negligence to require conduct that was flagrantly or conspicuously wrong, involving recklessness or serious disregard of an obvious risk. He also read “wilful act” in this clause as requiring an intended or obstinate breach, rather than merely a voluntary act.
Applying those interpretations, O’Donnell J concluded that the Foundation’s conduct did not amount to gross negligence or a wilful act, and that the limitation clause applied. The judgment records that this was his view; it does not present it as the court’s agreed conclusion. The overall ruling upheld the High Court judgment on liability, while the damages limitation issue remained divided between the judges’ judgments.