The Commercial Court had found the result of an arbitration award ‘obviously wrong’, and ineed bizarre.
Held: The appeal failed. The award was flawed, in failing to take account of the trading context between the parties: ‘The overall transaction here comprised the settlement of the original dispute. MRI’s claim against EMC was compromised in terms that three new contracts were entered into. EMC had derived the full benefit of the abandonment of MRI’s claim. Moreover, rather as in Foley . . the 2010 contract is part of a wider arrangement between the parties, which wider arrangement the parties had for some time, here for over one year, been acting upon.’ and ‘the use of the mandatory ‘shall’ in clauses 6.1, 9.1 and 9.2 is a strong indicator that the parties did not intend that a failure to agree should destroy their bargain. Given that they were contracting in January 2009 for delivery in 2010, it was no doubt sensible to leave open for future agreement in the conditions obtaining in 2010 the appropriate level of charges and the appropriate shipping schedule. In circumstances however where the parties had agreed every other aspect of the contract, including quality, specification and price, and where they had stipulated for the arbitration of disputes by a market tribunal, it is almost perverse to attribute to them an intention not to conclude a binding agreement, a fortiori where the agreement was an integral part of a wider overall transaction compromising an earlier dispute. ‘
Pill, Tomlinson, McCombe LJJ
[2013] EWCA Civ 156
Bailii
England and Wales
Citing:
Cited – Walford v Miles HL 1992
Agreement to Negotiate is Unworkable as a Contract
The buyers and sellers of a company agreed orally for the sellers to deal with the buyers exclusively and to terminate any negotiations between them and any other competing buyer. The sellers later decided not to proceed with their negotiations with . .
Mentioned – Sudbrook Trading Estate Ltd v Eggleton HL 1982
The grantors of an option, which contained a machinery for fixing the price, had refused to appoint a valuer and that made it impossible for the contractual machinery for the valuation of the option price to work. The House of Lords held that the . .
Cited – Mamidoil-Jetoil Greek Petroleum Company SA v Okta Crude Oil Refinery Ad Cross CA 22-Mar-2001
The court always leans against a conclusion which will leave parties who clearly intended to contract without a legally binding contract, and that this is the more so where they have acted as though they were bound. The court strains to supply . .
Cited – B J Aviation Ltd v Pool Aviation Ltd CA 18-Jan-2002
The parties disputed the effect of a clause in an option agreement, and as to whether it contained an agreement to negotiate and was therefore not binding.
Held: Chadwick LJ said: ‘First, each case must be decided on its own facts and on the . .
Cited – Foley v Classique Coaches Ltd CA 1934
The sellers had sold to the buyers a piece of land to use in the latter’s business as coach proprietors, and also contracted with them to supply all the petrol required for that business ‘at a price to be agreed by the parties in writing and from . .
Cited – F and G Sykes (Wessex) v Fine Fare Ltd CA 1967
There was an agreement by which the plaintiffs agreed to breed and provide chicks to nominated growers, the number of chicks to be provided to be ‘not less than 30,000 per week nor more than 80,000 per week during the first year of the agreement and . .
Lists of cited by and citing cases may be incomplete.
Contract
Leading Case
Updated: 09 November 2021; Ref: scu.471547