National Bank of Sharjah v Dellborg and Others: CA 9 Jul 1997

The parties disputed the meaning of a Tomlin order to which they had agreed.
Held: Saville LJ said ‘if the circumstances surrounding the making of the agreement showed to a reasonable man that to read paragraph 8 as covering only the amounts actually credited to the deposit accounts would produce a result which the parties clearly could not have intended, the court would (notwithstanding the meaning which the words bear as a matter of ordinary language) interpret the paragraph so as to accord with what a reasonable man, knowing of those circumstances, would understand it to mean. This is said to be justified on the basis that to do otherwise would result in the court interpreting the agreement in a way which, in the light of the surrounding circumstances, simply offended common sense.’ However: ‘where the words the parties have chosen to use have only one meaning, and that meaning (bearing in mind the aim or purpose of the agreement) is not self evidently nonsensical, the law should take that to be their intended agreement, and should not allow the surrounding circumstances to override what ( ex hypothesi ) is clear and obvious. This would enable all to know where they stand without the need for further investigations; and for the court to provide the answer, where the point is contested, without undue delay or expense. ‘
Saville LJ, Judge LJ
[1997] EWCA Civ 2070
England and Wales
CitedPrenn v Simmonds HL 1971
Backgroun Used to Construe Commercial Contract
Commercial contracts are to be construed in the light of all the background information which could reasonably have been expected to have been available to the parties in order to ascertain what would objectively have been understood to be their . .
CitedInvestors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
See AlsoNational Bank of Sharjah v Dellborg and Others CA 22-Feb-1993
On an ex parte application for a Mareva injunction, the party applying should file an affidavit making proper and fair disclosure of the fact supporting the allegation. Such an affidavit should normally be accompanied by enough documents to make the . .

Cited by:
CitedScottish Power Plc v Britoil (Exploration) Limited CA 18-Nov-1997
Five contracts existed regarding sale of natural gas from a field in the North Sea. The parties disputed whether the terms prevented the sale of gas to others.
Held: ‘On the language of the contract, the Sellers are not entitled to sell gas to . .

These lists may be incomplete.
Updated: 28 April 2021; Ref: scu.251065