Commercial Disputes Weekly Issue 297 29 September 2026

The Commercial Court was asked to consider whether a vessel remained on hire when it left the port of Warri due to the piracy risk. In reaching its conclusion that the vessel did remain on hire, the court was required to deal with questions of interpretation of standard form contracts where certain provisions have been deleted. The charterparty incorporated an amended version of the BIMCO Piracy Clause 2013 and the issue was whether the shipowner was permitted to leave Warri because of concerns about the piracy risk. The contract also contained specific rights to leave other named ports, but not Warri. The decision came before the court on an appeal from an arbitration award under section 69 of the Arbitration Act 1996. The court held that the tribunal’s decision was correct. It is only permissible to refer to deletions if the remaining words were ambiguous. This was not the case here. Although the remaining provision was more generally worded than the specific provisions that had been deleted, permitting “reasonable preventative measures to protect the Vessel, crew and cargo” could encompass leaving a port following piracy concerns. The fact that the express provisions had been deleted did not impose a limitation on the ordinary meaning of the words that remained. The Nigerian trading clause referring to other specific ports provided a different suite of rights applying in different circumstances and was therefore not relevant to interpretation of this clause.

Olam International Ltd v Pacific Basin Supramax Ltd The ‘Grande Island’ [2026] EWHC 2136 (Comm), 14 August 2026

LANDLORD AND TENANT

The Supreme Court has concluded that a claim made by a right to manage (“RTM”) company to the freeholders for the right to manage a block of flats was not invalid where notice of invitation to participate had not been given to one qualifying tenant in advance. The court considered the purpose of the legislation and in particular, that the procedural requirements are there to protect the qualifying tenants. Here, the relevant tenant had nonetheless agreed to become a member of the RTM company. The legislation does not set out the consequences of breach of the procedural requirements and it is for the court to decide the appropriate sanction in the circumstances. Invalidity may be too blunt a tool given the potential variation in seriousness of breaches. The court held that the freeholder can only raise objections by counter-notice to the RTM company’s satisfaction of the substantive entitlement conditions, not the procedural requirements. Further, a qualifying tenant who did not receive notice cannot prevent the transfer, therefore it should not be assumed that invalidity would be the sanction for procedural breaches. The appeal was allowed.

Avon Freeholds Limited v Cresta Court E RTM Company Limited [2026] UKSC 31, 27 August 2026

GUARANTEES

The claimant bank made payments under bonds relating to a construction project. It subsequently sought payment from Dragados under the counter-indemnities for the bonds. As Dragados had not paid the sums owing, nor provided any reasonable defence to the claim, the bank sought summary judgment. The court was satisfied that Dragados was well aware of the proceedings and had waived its right to appear, therefore it was appropriate to continue in its absence. The court was satisfied that they were classic on demand payment obligations, the demands were compliant and triggered the defendant’s obligation to pay the counter-indemnity. There was a suggestion of a dispute in relation to the construction project but that had no bearing on the obligations under the bonds and counter-indemnities. Summary judgment for the full sum was awarded.

Riyad Bank, London Branch v Dragados Industrial SA [2026] EWHC 2204 (Comm), 26 June 2026

PROPERTY

The Chancery Division has provided declarations in relation to a covenant over land where the entity owning the benefiting land changes. The relevant covenant related to overage payments on a plot of land in the event that planning permission for non-agricultural development was granted. The benefit of the covenant was originally Manningtree High School Limited, but they were subsequently dissolved and the defendant multi-academy trust took over the school. The court held that the transfer of the benefit of the covenant did not comply with section 136 of the Law of Property Act 1925. The original beneficiary no longer existed and so the covenant fell away.

Rose Builders (Properties) Ltd v Alpha Trust [2026] EWHC 2241 (Ch), 3 September 2026