Vitol Sa -v- Norelf Ltd; HL 10-Jul-1996

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.’

Court: HL
Date: 10-Jul-1996
Judges: Steyn, Mackay, Griffiths, Nolan, Hoffmann LL
Statutes: Arbitration Act 1979
Links: Gazette, Times,
References: [1996] AC 800,
Cases Cited:
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