In long-running litigation between Virgin and Alaska Airlines, Virgin has obtained summary judgment for more than $30 million.
The proceedings follow previous proceedings related to a contract between the parties (the Current TMLA). Virgin succeeded in the Commercial Court and Court of Appeal in the original proceedings, establishing that under the Current TMLA Alaska is obliged to pay a ‘Minimum Royalty’ for the rights it has in relation to the Virgin brand irrespective of how much it uses that brand.
In the present proceedings, Alaska alleges breach of the exclusivity rights in the Current TMLA on Virgin’s part, and seeks to argue that the Current TMLA has been terminated at common law. Virgin denies breach and termination, and counterclaims for the Minimum Royalties due under the Current TMLA.
Virgin pursued an application for summary judgment in respect of part of its claim. Alaska sought to resist the application by introducing amendments, including an argument that the sums due under the Current TMLA absent use of the Virgin brand were payable solely for the rights of exclusivity (which it says Virgin has breached), and an associated claim in unjust enrichment for total failure of basis. Virgin argued that the amendments had no prospect of success, and also relied on a no-set off provision in the Current TMLA to argue that summary judgment should be granted in any event.
The key issue was whether the amendments had any real prospect of success. Virgin (acting through Daniel Toledano KC and Joshua Crow, instructed by Slaughter and May) successfully persuaded the Court (Foxton J) that the amendments had no real prospect of success.
The court also resolved, albeit obiter, the question of whether the no-set off clause applied to a defence of circuity of action founded on a claim in unjust enrichment. Virgin again succeeded, with Foxton J holding that the no-set off clause did prevent a defendant from raising such a defence on an application for summary judgment in respect of contractual debts.
View Judgment