The contractor appealed a deemed denial of its claim for costs after the agency terminated its contract for convenience. The contractor argued that the termination constituted an abuse of discretion, claiming damages for unabsorbed airtime, business interruption losses, and severance costs. The CBCA upheld the agency's right to terminate the contract, while allowing recovery only of the severance costs.
Capital FM (PVT.) LTD v. Agency for Global Media, CBCA 8601
- Background - The agency and contractor executed a contract that established the contractor as a distributor of the agency's programming content, with a monthly payment of $7,200. In May 2025, the agency terminated the contract, asserting its content was no longer needed. The contractor sought $65,200 for unabsorbed airtime, business interruption losses, and severance costs. The contractor to appealed to the CBCA after a deemed denial.
- Termination for Convenience - The contractor alleged the agency abused its discretion by terminating the contract for improper reliance on the termination clause and failure to follow proper procedures. CBCA found that the agency maintained the right to terminate for convenience as established in the contract and affirmed that the termination process was correctly followed.
- Damages - The contractor sought damages for unabsorbed airtime and business losses, characterizing them as direct consequences of contract termination. However, the Board upheld the limitation on such claims, indicating that consequential damages are not recoverable under the termination clause. The contractor's claim for severance costs, however, was granted, as it demonstrated a legal obligation to pay severance based on employment contracts, resulting in a recovery of $10,000.
The contractor is represented by Kamran Jamil Khawaja of Capital FM (Pvt.) Ltd. The government is represented by Anna K. Drake and Jennifer DeMaster of the Agency for Global Media.