All of which brings us, in a roundabout way, to Ipsos S.A. v Dentsu Aegis Network Limited [2015] EWHC 1171 (Comm) – the latest authority in a chain of cases stretching back to Senate Electrical, and beyond, where a Buyer’s Claim Notice has been called into question. In Ipsos, the notice provision in the SPA was in similar terms to the equivalent clause in Laminates, namely:
‘No Seller Warranty Claim…shall be brought against the Seller unless (and the Seller shall only have liability in respect of any such Claim if) the Purchaser shall have given to the Seller written notice of such Claim… specifying in reasonable detail: (i) the matter which gives rise to the Claim; (ii) the nature of the Claim; and (iii) (so far as is reasonably practicable at the time of notification) the amount claimed in respect thereof (comprising the Purchaser’s good faith calculation of the loss thereby alleged to have been suffered)… such Claim Notice to be given by…the second anniversary of Completion.’
The question for the Court was whether an effective Claim Notice had been served in relation to a substantial breach of warranty claim. This was a matter of some importance because, if the notice which the Buyer had served was not effective, the Seller would have no liability.
Construing the notice provision, the judge observed that, to be effective, the notice needed to state that a claim was being made and clearly specify the matters identified in (i) to (iii). Drawing on Cooke J’s judgment in Laminates, he considered that ‘the matter which gives rise to the Claim’ encompassed the underlying facts, events and circumstances which constituted the factual basis on which the claim is posited, ‘the nature of the Claim’ meant what was being claimed and the basis of it by reference to the SPA and ‘the amount claimed’ required a calculation on the Buyer’s part of the loss which had been suffered. As for what amounted to ‘reasonable detail’, this depended on the nature of the claim, bearing in mind that the details to be provided need not be as extensive as those required in the legal proceedings to be issued and served within six months of the notice.
Analysing the Buyer’s notice, the judge went on to conclude that a reasonable recipient with knowledge of the context in which it was written would not have understood it to be a Claim Notice. This was because the Buyer’s notice did not identify itself as a Claim Notice, make any reference to the governing notice provision or indicate an intent to claim damages for breach of warranty. It also could not be inferred that the notice was a Claim Notice, simply because the Buyer’s notice had been served two days before the deadline. In the judge’s view, the Buyer’s notice otherwise fell down because it did not specify ‘the matter which gives rise to the Claim’ (in this case, an alleged breach of Brazilian labour law) or ‘the nature of the Claim’ (because the notice made no real attempt to identify the form and substance of the Claim). As a result, the Buyer’s claim failed.