This alert focuses on the recent judgment in Associated British Ports v Tata Steel UK Ltd [2017] EWHC 694 (Ch). ABP demonstrates the English courts’ reluctance to find clauses and/or contracts void for uncertainty where they contain terms to be agreed or negotiated by the parties. This is particularly so where the dispute arises from a long-term contract and there has been a significant degree of performance. The decision also reaffirms that clear words will be needed to prevent specific types of disputes from falling within the scope of an arbitration clause.

Authors: Richard G. Swinburn Andrew Meads Alexander Sandiforth Claire E. Don

Background

Associated British Ports (“ABP”) owns and operates a number of ports in the UK, including the harbour at Port Talbot used by Tata Steel (“Tata”). In March 1995 the parties entered into a 25-year licence arrangement (the “Licence”). Clause 22 of the Licence provided that after the midway point of the Licence:

“… in the event of any major physical or financial change in circumstances … either party may serve notice on the other requiring the terms of this Licence to be renegotiated …. The parties shall immediately seek to agree amended terms reflecting such change in circumstances and if agreement is not reached within a period of six months from the date of the notice the matter shall be referred to an Arbitrator…” (emphasis added).