The seller was to deliver molasses by a ship set to leave on a certain date. The market was falling. The buyer, when it was clear that the ship would be unable to leave on the day fixed, sent a telex to say that the the contract was repudiated. The seller did nothing, but later sued for the loss on a later sale. The buyer said that the seller’s mere failure to carry out his side of the contract was sufficient to be an acceptance of the repudiation, thus excusing the buyer from the purchase.
Held: The seller’s appeal succeeded. A party suffering a repudiation of a contract can notify his election to accept or affirm the contract in any way: “a failure to perform may sometimes signify to a repudiating party an election by the aggrieved party to treat the contract as at an end.” Silence can be held to be an acceptance of a contract, and it can exceptionally, and as a question of fact, also amount to an acceptance of a repudiation.
Lord Steyn said: “The primary purpose of the Act of 1979 was to reduce the extent of the court’s supervisory jurisdiction over arbitration awards. It did so by substituting for the special case procedure a limited system of filtered appeals on questions of law.”
Judges: Steyn, Mackay, Griffiths, Nolan, Hoffmann LL
Statutes: Arbitration Act 1979
Links: Gazette, Times,
References:  AC 800,
- Vitol Sa -v- Norelf Ltd (the 'Santa Clara'), QBD, At first instance, (Times 20-May-93, Gazette 25-Aug-93,  4 All ER 109,  1 WLR 1390)
- Vitol Sa -v- Norelf Ltd ('the Santa Cara'), CA, Appeal from, (Times 02-Jun-95, Ind Summary 12-Jun-95,  3 All ER 971,  QB 108)
- Overseas Buyers -v- Granadex, , Cited, ( 2 Lloyd's Rep 608)
- Fercometal -v- Mediterranean Shipping Co SA, The Simona, HL, Cited, ( AC 788,  2 All ER 742,  3 WLR 200,  2 Lloyds Rep 199)
- State Trading Corporation of India Ltd -v- M Golodetz Ltd (Now Transcontinental Affiliates Ltd), CA, Went too far, ( 2 Lloyd's Rep 277)
- Rust -v- Abbey Life Assurance Co ltd, CA, Cited, ( 2 LLoyd's Rep 334)
- Force India Formula One Team Ltd -v- Etihad Airways PJSC and Another, QBD, Cited, (Bailii,  EWHC 2768 (QB),  ETMR 14)