In EE Ltd v Virgin Mobile Telecoms Ltd [2025] EWCA Civ 70, the Court of Appeal confirmed that EE’s claim based upon a breach of an exclusivity clauses for “anticipated profits” was effectively cut off by the exclusion clause within the supply agreement. We discuss the key terms, the background of this case, and what this decision means in practice.
Virgin contracted with EE to use its network infrastructure to provide 2G, 3G and 4G mobile services to Virgin customers. The contract contained an exclusivity clause stipulating that Virgin would exclusively use the EE network, rather than other providers’ networks, to provide those services to its customers.
EE issued a claim against Virgin, alleging (amongst other things) that:
Virgin denied the breach and argued that the claim was “precluded” as it was a claim for “anticipated profits”, and therefore expressly excluded under the terms of the supply agreement.
Virgin applied to strike out EE’s claim on the above basis. Whilst EE contested and clarified that its claim was not for “anticipated profits”, rather, it was for “charges unlawfully avoided”, the High Court rejected this argument. As it considered the essence of the claim was to recover profits and that the term “loss of anticipated profits” likely meant the same as “loss of profits”. The High Court therefore granted summary judgment in favour of Virgin.
EE appealed this decision on the basis that:
It also argued that:
In dismissing EE’s appeal by a majority decision, the Court of Appeal considered:
It also did not agree that EE was left with no remedy for the breach of the exclusivity clause. This is because the contract also provided for injunctive relief and claims for wasted expenditure were not excluded. The availability of these remedies was also relevant to the question of what was in the mind of Virgin and EE when they agreed the terms of the supply agreement and its exclusion clause that referred to “anticipated profits” being excluded.
However, Phillips LJ did not agree with the Court of Appeal’s (Zacaroli LJ’s and Coulson LJ’s) majority decision. Instead, he considered that it would be contrary to commercial business sense if the parties’ intention was that the exclusivity clause could be breached, allowing Virgin to divert customers to alternate providers. And that because the exclusivity clause was so central to the parties’ bargain, he stated that express and unequivocal wording should have been used to exclude EE’s right to damages for a breach of that provision.
The key points to take away from this decision are:
The Court of Appeal’s decision is a useful reminder of the importance of all contractual terms (not just exclusion clauses) being clearly and unequivocally worded. If your intentions, and/or the remedies for any potential breach of contract, are not clearly recorded in a contract, you may end being on the wrong end of the Court’s interpretation of the terms of that contract. If you need help with a Dispute and/or ensuring your commercial contracts and/or terms and conditions actually have the meaning and effect you intend, please get in touch.
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