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Commercial Disputes Weekly – Issue 5622 December 2020

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BITE SIZE KNOW HOW FROM THE ENGLISH COURTS

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"Whilst the redundancy argument has a role to play in the exercise of contractual interpretation, it all depends on the construction issue in question, the effect of the alternative interpretation and the contractual context as a whole. The mere fact that a natural interpretation of a contract could render another term redundant is an insufficient basis for an unnatural construction, especially where a standard form is involved."ABC Electrification Ltd v Network Rail Infrastructure Ltd

Anti-suit injunctions
Demonstrating the English court’s willingness to uphold agreements to arbitrate, the Commercial Court has continued an anti-suit injunction restraining Chinese receivers from continuing proceedings brought before the Qingdao Maritime Court in breach of a London arbitration clause incorporated into the relevant bills of lading.
Grace Ocean Private Ltd v Cofco Global Harvest (Zhangjiagang) Trading Co Ltd (“Bulk Poland”)

Arbitration
The Commercial Court has refused to stay English proceedings under section 9 Arbitration Act 1996 in circumstances where the parties had already referred a dispute to “non-binding arbitration”, commenting that the very essence of “arbitration” under the 1996 Act is a consensual submission of a dispute to an individual or individuals by parties bound by contract to abide by and honour its determination by that individual or individuals pursuant to that submission.
IS Prime Ltd v TF Global Markets (UK) Ltd

Arbitration
Where a tribunal had admitted that it had made an error in calculating damages, but refused to correct its award on the basis that it had intended to award substantial damages and the corrected award would be radically different to the one it intended to make, the Commercial Court has upheld a challenge pursuant to section 68 Arbitration Act 1996 and remitted parts of the award to the tribunal for reconsideration. The admitted mistake was a serious irregularity, and it would cause substantial injustice to the claimants.
Doglemor Trade Ltd & Ors v Caledor Consulting Ltd & Anr

Contract
In a decision which will be of particular interest to contractors operating in the rail sector, the Court of Appeal has rejected arguments on redundancy and found that “default” in the definition of disallowed costs in an agreement based on the ICE Conditions, subject to standard amendments used by Network Rail, carried its ordinary and natural meaning, and so included failure by the contractor to comply with its contractual obligations.
ABC Electrification Ltd v Network Rail Infrastructure Ltd

Interim relief
Providing an important reminder that, absent “special factors”, where an interim application turned on the balance of convenience the normal order for costs should be an order for costs to be reserved, the Court of Appeal has commented that the quest for the successful and unsuccessful party in such cases is usually fruitless.
Digby v Melford Capital Partners (Holdings) LLP

Limitation
The Court of Appeal has concluded that, where the limitation period has expired and a party seeks to plead a new cause of action in existing proceedings, it is necessary to identify, at the time permission is sought from the court, what facts are then in issue in the proceedings, and this cannot be done by looking at facts that were previously in issue, but are no longer. Claimants could not therefore rely on facts set out in Particulars of Claim which had been subsequently struck out.
Libyan Investment Authority & Ors v King & Ors

Performance guarantees
Although the English courts will normally uphold the principle that a performance guarantee should be paid out without equivocation, in circumstances where a party was clearly not entitled to make a demand under a guarantee, and indeed had disavowed all knowledge of such a demand, the High Court has restrained payment, noting that such an injunction would preserve the status quo and support arbitral proceedings.
ETC Export Trading SA v APLAS Importer

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:

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