General Electric Company v. APR Energy PLC

Background

General Electric Company (GE) sued APR Energy plc over APR’s failure to pay resale fees under a 2013 Master Supply Agreement. APR and related entities asserted two counterclaims against GE: one alleging that GE breached a 2013 Business Transfer Agreement by failing to provide unencumbered title to four Forge turbines, and another alleging that GE breached the Master Supply Agreement’s warranty by selling a defective GT2 turbine generator.

The parties filed competing motions for summary judgment, which asks the court to rule because no genuine dispute of important fact requires a trial. GE sought judgment on all claims and counterclaims. APR sought partial judgment on GE’s claim and its title-related counterclaim, along with a declaration that GE’s liability was not capped.

GE’s Resale-Fee Claim

The Master Supply Agreement required APR to pay GE a fee if APR resold turbines. GE later conditionally waived the fee for nine turbines sold to SA Power Networks, but the waiver required APR to use 65% of the sale’s net proceeds to buy new turbines from GE. APR did not buy additional turbines from GE and did not pay the resale fee.

The court held that these undisputed facts established APR’s breach. It found that the waiver depended on APR’s purchase of new turbines, and it did not matter whether APR received the sale proceeds directly or whether the proceeds were paid to Bank of America. The court therefore granted GE’s motion for summary judgment on Count One and denied APR’s motion on that claim.

APR’s Title-Related Counterclaim

APR alleged that GE breached the Business Transfer Agreement by conveying the Forge turbines subject to ANZ Bank’s security interest. GE argued that the claim was untimely, that the turbines were not covered assets, that GE had good title, and that APR failed to reduce its losses or was barred by equitable estoppel—a doctrine that can prevent a party from asserting a claim after inducing reasonable reliance on a misleading representation.

The court denied GE’s motion for summary judgment on Counterclaim One. It found that the contract was unclear about whether APR’s October 2015 letter was a timely claim, even though the letter demanded indemnification before the contract’s 24-month period expired. The court also found factual disputes about when Forge took possession of the turbines and when ANZ Bank’s security interest attached. It rejected GE’s argument that the Forge turbines were excluded from the contract’s definition of “Equipment Assets,” concluding that the relevant contribution agreement included them. The court further held that APR’s mitigation efforts did not fail as a matter of law and that factual disputes prevented judgment on GE’s equitable-estoppel defense.

APR also sought a declaratory judgment about whether a $5 million indemnification cap—allegedly reduced to $2.5 million by a later agreement—applied to GE. The court denied that request without prejudice because GE’s liability had not yet been decided, making the damages-cap issue premature.

APR’s Warranty Counterclaim

The parties agreed that the GT2 turbine was defective and that APR notified GE of the problem. They disagreed about whether APR complied with the contractual requirement to make the equipment available for correction after APR sent the generator to a third party for inspection and repair.

The court held that the phrase “make such Equipment available” was ambiguous. Because the contract did not clearly establish what APR had to do and whether GE’s prior awareness of the failure satisfied that obligation, the court denied both GE’s and APR’s motions for summary judgment on Counterclaim Two.

Order and Effect

Judge Victor Marrero ordered that APR’s motion for partial summary judgment be denied in its entirety. GE’s motion was granted in part and denied in part: it was granted on Count One and denied in all other respects. The parties’ earlier letter motions for summary judgment were denied as moot. The parties were ordered to submit a trial timeline within 20 days of the order’s entry.