Commercial Disputes Weekly – Issue 2129 July 2024

Nuisance – Statutory Interpretation
The Supreme Court held that a canal owner was able to bring a claim in nuisance or trespass against a water company who discharged foul water into their canal. It rejected an argument that the claim would only be valid if there had been negligence or deliberate misconduct, so the claim could be brought when foul water was discharged simply because the system exceeded its hydraulic capacity. The canal owner has a proprietary right in the watercourse, which included a right to preserve the quality of the water that is protected by common law. Those common law rights were not excluded by the Water Industry Act 1991 which sets out the regulatory scheme for sewerage.
Manchester Ship Canal Company Ltd v United Utilities Water Ltd No 2 [2024] UKSC 22, 2 July 2024

Contract Interpretation
The Commercial Court was asked to decide whether a demand under a guarantee based on a breach of the loan-to-value ratio was valid. At the time the court proceedings were commenced the ratio had not exceeded 60% as required. However, it subsequently did and a second demand was made under the guarantee. The particulars of claim were also amended to incorporate a claim based on that second demand. The court held that this satisfied the requirement that the lender could only “make a claim” under the guarantee when the loan-to-value ratio exceeded 60%. This included making an additional claim in existing proceedings.
RS Luxembourg II Sarl v Deburo Real Estate Holding GmbH [2024] EWHC 1515 (Comm), 21 June 2024

Enforcement – State Immunity
The Commercial Court has granted final charging orders over two residential properties in the UK owned by the Federal Republic of Nigeria. The claimant was owed over US$67m by Nigeria pursuant to an arbitration award and sought to enforce that award over these properties. Neither property was recorded as being diplomatic or consular premises. The properties were rented out to residential tenants unconnected with Nigeria and its mission and so were being used for commercial purposes under the State Immunity Act 1978 Pt I s.13(4). As a result, state immunity did not prevent enforcement against the properties.
Zhongshan Fucheng Industrial Investment Co Ltd v Federal Republic of Nigeria [2024] EWHC 1503 (Comm), 14 June 2024

Adjudication – Injunction
The Technology and Construction Court has refused to grant an injunction to prevent the employer under a JCT construction contract from issuing further adjudication notices. The employer had already issued three adjudication notices and Part 8 proceedings relating to scope of work, defects and liquidated damages. The court rejected the contractor’s argument that it was unreasonable and oppressive for it to deal with multiple adjudications at once. The court could grant an injunction if the adjudicator’s lack of jurisdiction was clear, but the mere fact of parallel proceedings did not justify such restraint. The potential of dealing with multiple adjudications was part of the right to adjudicate. This was not an exceptional case that merited the intervention of the court.
Beck Interiors Ltd v Eros Ltd [2024] EWHC (TCC), 28 June 2024 (judgment not yet publicly available)

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: