Catalyst Recycling Ltd v Nickelhütte Aue GmbH

Foreign law must be proved through suitably qualified expert evidence. The English court may scrutinise the expert evidence and translated statutory wording, and reject an interpretation that is patently inconsistent with that wording unless an additional rule of foreign law justifies it.

Where security has been provided before notification, a later concern about its adequacy does not establish illegality unless the relevant authority makes the formal determination required by the applicable law. Even technical illegality does not, without more, constitute repudiatory breach of an English-law contract. The contractual term allegedly breached must be identified and its consequences assessed.

Catalyst Recycling Ltd, formerly Chris Cutchey Ltd, acted as principal under agency agreements with Nickelhütte Aue GmbH to secure waste-recycling supplies for shipment from the United Kingdom and Ireland to Germany.

The appellant alleged that three shipments were illegal because German authorities questioned whether an existing financial guarantee, issued in the former company name, covered Catalyst, and because the Irish shipment was made before written approval had been issued.

His Honour Judge Grenfell, sitting as a High Court Judge, held that no shipment was illegal under German law and that, in any event, the respondents’ conduct was not repudiatory: [2007] EWHC 866 (QB). The appeal concerned the construction of the European waste-shipment regime, section 7 of the German Waste Transport Law and the alleged contractual right to terminate.

1. Appeal dismissed. The court upheld the finding that none of the three shipments was shown to be illegal under German law. It also upheld the alternative conclusion that the respondents’ conduct would not have amounted to repudiatory breach even if a technical breach had been established.
2. The court construed the European Transhipment of Waste Regulation. Where the destination authority had given an Article 9 consent not to raise objections concerning specified waste shipments to a specific recovery facility, notification under Article 6 remained necessary. The ordinary 30-day period in Article 8(1) did not apply because Article 9(5) omitted Article 8(1). Article 8(2) to (6) continued to govern the actual shipment. The additional written permits issued by Dresden RP were therefore unnecessary.
3. The alleged German-law illegality turned on sections 7(1) and 7(2) of the German Waste Transport Law. On the translated wording, section 7(1) required security before notification, which had occurred. Section 7(2) placed responsibility for determining security on the authority at the place of shipment, while permitting Dresden RP to determine replacement security where the statutory condition was met. That power required an official determination by administrative act, or Bescheid, stating the security required. Dresden RP had made no such determination before the shipments.
4. The court applied the guidance in A/S Tallina Laevauhisus and others v Estonian State S.S. Line and another (1947) 80 Ll.R 99 at 107. Foreign law is a question of fact proved by a suitably qualified expert, although the English court may scrutinise the evidence, translation and asserted legal effect.
5. There was no repudiatory breach under English law. The respondents had attempted to perform the agreements, had obtained the financial guarantee and were not deliberately flouting German law. The appellants had not identified an adequate express or implied contractual term concerning permits or security, nor shown breach of a condition or conduct evincing an intention not to continue performance. A breach of foreign law, without more, was insufficient.
6. Lord Justice Lawrence Collins agreed that the agreements were governed in substance by English law, while their mode of performance was governed by German and European Union law. Lord Justice Rimer agreed with both judgments.

• Court of Appeal (Civil Division) — Appeal dismissed, affirming the decision of His Honour Judge Grenfell, sitting as a High Court Judge, in [2007] EWHC 866 (QB).