Knowledge Counsel London
"“…the proper interpretation of the contract does not entail, and there is no implied term, that the conditions precedent to the Buyers’ debt obligation are to be ignored because of the Buyers’ breach of contract…”"
Maritime
The UK Supreme Court has held that the doctrine of ‘deemed fulfilment’ of a condition precedent that exists in Scottish law was not part of English law. The issue arose in relation to memoranda of agreement for the sale of three ships under the Norwegian Saleform 2012. The buyers had failed to provide ‘know your client’ documentation to enable the escrow account for the deposit to be opened. As a result, the time for the deposit to be paid had not started running. After several weeks’ delay the sellers had purported to cancel the contracts on the basis that the deposits were due but had not been paid. The Supreme Court held that where one party wrongfully prevents a condition precedent from being satisfied, there is no legal principle that allows the condition to be deemed as being satisfied. The buyers were in breach of contract but the sellers’ remedy was in damages, rather than for a debt due. As the market for such vessels had improved, the sellers had suffered no loss as they could sell the vessels for a higher price than contracted for originally.
See here for our more detailed article on the decision.
Contract interpretation – Energy
The parties (URE and Genesis) entered into a four-year contract for the supply of electricity by URE as part of arrangements that would ultimately lead to a 25 year contract including installation of LED lighting and construction of a solar farm to power the housing estate. During the contract period, Genesis amalgamated with another housing entity to create NHG. The parties fell out and NHG indicated that it no longer intended to proceed with the long-term contract. URE purported to terminate the four-year contract for alleged breach by NHG in failing to allow access to replace meters. It later issued a second termination letter asserting that the amalgamation without URE’s approval entitled URE to terminate. The Court of Appeal upheld the judge’s conclusion that URE was entitled to terminate the contract. It rejected an argument that URE had waived its right to rely on the breach to terminate the contract given that several months had passed since the amalgamation and URE had continued to perform the contract. URE (its director) had not been aware of the right to terminate as a result of the amalgamation and as a result could not be said to have waived the right.
URE Energy Ltd v Notting Hill Genesis [2025] EWCA Civ 1407, 10 November 2025
Arbitration
The Commercial Court has rejected an application to substitute a party enforcing an ICSID Convention award. Operafund had obtained the award against Spain under the Energy Charter Treaty. It obtained an order from the English court recognising the award and then applied to substitute another party B, as it had assigned all its interests in the award to B. The court held that the ICSID Convention only permitted “a party to the dispute” to seek recognition and enforcement of an award. That can only refer to a party to the arbitration itself. The conclusion was a result of construction of the ICSID Convention using the Vienna Convention principles of construction.
ESG
Following the first stage trial of the extensive English litigation relating to the collapse of the Fundão Dam in Brazil, the Technology and Construction Court held that BHP were strictly liable and at fault for damage caused by the collapse, pursuant to environmental and civil codes of Brazilian law. It was activity by Samarco that caused the damage, as was common ground and BHP were involved in Samarco’s activities at a strategic and operational level. Under Brazilian law there is no distinction between direct and indirect polluters. The causes of the collapse included inadequate drainage and continued raising of the dam in circumstances where stability assessments and liquefaction studies should have been carried out, together with remediation work. The risk of the collapse of the dam was foreseeable and could have been averted. The court also set out a number of decisions relating to the running of time and when it would be barred, concluding that the claimants had until at least September 2029.
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