Termination Uncertainties: Latest Case

November 24, 2011

In AstraZeneca UK Ltd v International Business Machines Corporation[2011] EWHC 306 (TCC) , the Hon Mr Justice Ramsay has given judgment in an on-going dispute between AstraZeneca and IBM. The issues with which the court was concerned relate to the obligations of the parties arising after termination. The judgment is effectively a series of declarations determining the interpretation of terms used in a Master Services Agreement. It appears to be of very limited interest to those not directly involved but the comments made in the judgment (202 paragraphs) relating to the meaning of certain terms may be of wider interest. The matters that gained special attention were the following:

·        the meaning of the phrase ‘shared infrastructure’ and whether it included the infrastructure in the form of equipment, systems and facilities at IBM’s shared data centres which are used to provide Data Centre Facilities Services under the Master Services Agreement (including data centres in Connecticut, Sweden, Singapore and Japan).

·        the meaning of the phrase ‘associated Systems and Third Party contracts’, and especially with what the systems and contracts had to be associated

·        the mechanism for AstraZeneca to request shared services and the extent of IBM’s obligation to provide them after the ‘extended termination date’

·        whether AstraZeneca was under an obligation to provide an IT Transfer Plan

·        whether IBM’s obligations to provide Termination Assistance were not conditional on the provision of an IT Transfer Plan

·        the extent of IBM’s obligation to provide a fixed fee for termination assistance