The Court of Appeal recently held that 'market practice' is too wide a term to be implied into an International Swaps and Derivatives Association (ISDA) master agreement covering currency trading transactions by dismissing a claim arising from the 'de-pegging' of the Swiss franc from the euro. The desire to maintain the certainty and stability of the relationship between those contracting based on the ISDA master agreement underpinned the court's decision.
The English civil justice system has shown itself to be capable of rapid change as it adapts to the new reality caused by COVID-19. The clarion call from the English courts is that they are open for business, driven by the need to maintain the access to justice which is vital for the functioning of civil society. However, this will not be an easy task and it would be naive to think that there will not be teething problems during the move into a new era of conducting litigation in new ways.
The High Court recently upheld a tiered dispute resolution clause in accordance with established principles of contractual interpretation. The court ordered a stay of proceedings for mediation and, in support of the mediation, also ordered pleadings to be served in advance to optimise the prospects of a settlement. This decision continues the post-Sureterm union between commercial common sense and the plain and ordinary meaning of words.
The Court of Appeal recently reiterated that, while evidence of pre-contractual negotiations can be adduced to demonstrate how a transaction came about or what its commercial aims were, it cannot be adduced to aid the interpretation of the contractual provisions themselves. The case also confirms that the English courts continue to take a doctrinal approach to contractual interpretation.
It is understandable that directors might be reluctant to seek legal advice – be it due to concern about time or cost or a potential conflict of interest if seeking advice internally. However, as a recent case demonstrates, this is a small price to pay to avoid the time and financial cost of a claim, especially when a company's subsequent precarious financial position shines a light on an officer's behaviour and competence.
In a recent case, the High Court confirmed the validity of a senior noteholder's directions under a note structure governed by the laws of multiple jurisdictions. In doing so, it highlighted the common ground between the London and New York markets with regard to the common law principles of contractual construction and demonstrated the efficiency of the speedy trial procedure in the Financial List.
The Court of Appeal recently applied established English conflict of laws rules in holding that a non-bearer holder of issued notes was not entitled to sue under those notes for breach of contract. In doing so, the court has provided commercial certainty to downstream holders of interests in securities, but left open important questions as to third-party redress under these structures.
A recent High Court decision has provided some clarification of the scope of the compulsory jurisdiction of the Financial Ombudsman Service. The decision has left the scope of that jurisdiction open to discussion and appears to suggest that the courts will take a more mechanical approach to reviewing regulatory decisions.
The Supreme Court recently dismissed an appeal in Wood v Sureterm Direct Ltd. The court upheld the Court of Appeal's decision on the meaning of an indemnity clause and agreed with its application of established contractual interpretation doctrine. The decision confirms the established judicial approach to contractual interpretation: that is, the focus on the words of a given clause.
The High Court recently held that the defendant signatory to a commitment letter had intended to be legally bound by that document. In so finding, the court held that the defendant was in anticipatory repudiatory breach of contract. While the decision ultimately turned on the words of the commitment letter, it demonstrates that the court will take a pragmatic approach to determining intention to create legal relations.
In Teoco UK Limited v Aircom Jersey 4 Limited the High Court held that a buyer gave inadequate notice of certain breach of warranty claims, thereby preventing it from pursuing those claims (worth around £3.5 million). The court held that the buyer did not specify the warranties in respect of which it was claiming, and that it was too "tentative and contingent" in the description of its claims.
The Court of Appeal recently reversed a first-instance decision of the High Court by allowing early redemption of certain convertible securities (known as 'enhanced capital notes'). While there was no dispute as to the applicable principles of contractual interpretation, the Court of Appeal's judgment highlights that very different conclusions can be reached when applying those principles to complex transaction wording.