Beruflich Dokumente
Kultur Dokumente
Issue 8
In this issue:
Legislation
Environment Transport and Works
Bureau Technical Circulars
20/2005, 2/2003C, 16/95B, 19/2005
Case Law
Petromec Inc
v
Petroleo Brasileiro SA
Beyond the Network Ltd
v
Vectone Ltd
Disclaimer:
The material and information in this Bulletin is prepared for general
information only. Detailed professional advice should be sought and
obtained before taking or refraining from any action based upon it. Whilst
we endeavour to ensure the accuracy and completeness of the material and
information herein, we accept no responsibility for loss occasioned as a
result of reliance placed thereon.
Editorial Team
Peter Borg
Nicholas Turner
KM Liew
Leo Cheng
LONDON
BIRMINGHAM
BRISTOL EDINBURGH
GLASGOW
LEEDS
MANCHESTER
BRUSSELS
DUBAI
HONG KONG
SHANGHAI
www.pinsentmasons.com
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2.
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Case Law
Petromec Inc v Petroleo Brasileiro SA Petrobas
This English Court of Appeal decision held that a contract that contains an express obligation
for good faith negotiations may be enforceable according to the terms of such provision.
Background
It is generally thought that the English courts will be
reluctant to enforce obligations to negotiate in good faith.
Such obligations are often thought of as a type of
"agreement to agree" and thus too uncertain to enforce.
The leading case that is often cited in connection with
these issues is the decision of the House of Lords in
That case concerned
Walford v Miles in 1992.
negotiations for the sale of a business in the course of
which the vendor agreed not to negotiate with any third
party and to negotiate only with a single prospective
purchaser. This undertaking was against the background
that there was no concluded agreement at all between the
parties, since everything was "subject to contract".
The House of Lords in the Walford case held that the
undertaking to negotiate with only one purchaser was
unenforceable because there was no provision saying
how long it was to last. The House of Lords also held that
it was impossible to imply a term into the agreement that
the parties would negotiate in good faith, as that was
inherently inconsistent with the position that the parties
were negotiating subject to contract.
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Held
The Court of Appeal found that the Agreement was
legally enforceable and held that the express obligation
to negotiate the additional costs in good faith was not a
bare agreement to negotiate. The Court of Appeal
commented that it would be "a strong thing to declare
unenforceable a clause into which the parties have
deliberately and expressly entered." The Court of
Appeal also commented that it did not consider that
Walford v Miles represented binding authority that an
express obligation to negotiate would always be
completely without legal substance.
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4.3
5.
REGULATIONS.
This Agreement is made
expressly subject to all present and future valid
orders, regulations of any regulatory body having
jurisdiction over the subject matter of this
Agreement, and to the laws of the Hong Kong, SAR.
The Parties hereby submit to the exclusive
jurisdiction of the courts of Hong Kong, SAR.
Held
The Court held that Clause 11.3 was inoperative as an
arbitration agreement because:1.
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2.
3.
4.
Commentary
This decision, while not ground breaking, does
provide a timely reminder of the importance of getting
the terms of a contract right, particularly in relation to
certainty and compatibility between clauses.
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27 October 2005
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International Arbitration
December 2005 (Vol 22 No 6)
Haydn Main discusses the English Court of Appeals
decision in Cetelem SA v Roust Holdings, which may
have important implications for parties seeking urgent
Page 5 of 7
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Time at large
Contract Journal 30 November 2005
Geoff Brewer comments on the Court of Appeal decision
in Shawton Engineering v DGP International that where
the requirement is to complete works within a reasonable
time, that reasonable time for completion must be
established and notice making time of the essence given
before a contract can be terminated for delay.
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Middle East
A clear objective
Middle East Economic Digest (MEED) 16-22 December
2005 (Vol 49 No 50)
This is a special report on Saudi Arabia with information
on employment, terrorism, economic reform, the impact of
the kingdom's recent accession to the World Trade
Organisation, the petrochemicals industry, project finance,
water conservation, mining and transport.
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FEBRUARY 2006
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