O'Neill v Avic International Corporation (UK) Ltd (Rev 2)

An oral contract may be made without written formalities. The absence of a written record concerns proof rather than validity. In a substantial commercial transaction, however, the court should approach an alleged oral agreement with caution. Contemporary documents, electronic communications, and known or probable facts generally provide a more reliable basis for findings than confident recollections of conversations. This is guidance, not a rule requiring documentary evidence in every case. An entirely oral agreement may still be proved. Where the alleged terms involve a substantial payment, the absence of any contemporaneous confirmation, combined with imprecise terms and documentary evidence pointing elsewhere, may justify rejecting the alleged agreement.

Mr O’Neill claimed that Avic International Corporation (UK) Ltd had orally agreed to pay him 2 per cent of the value of the Rolleston solar project if he resolved an accreditation problem. He relied principally on conversations on 30 May 2015, a handwritten note on an envelope allegedly prepared on 30 June 2015, and later invoices.

The defendant denied that any fee had been agreed. The trial concerned whether the alleged agreement existed and, if so, whether Mr O’Neill had resolved the accreditation issue. Mr O’Neill pursued no alternative claim for reasonable remuneration or quantum meruit.

1. The claim was dismissed. Mr O’Neill failed to prove an agreement under which Avic UK would pay 2 per cent of £27 million, or of any other value, upon accreditation of the Rolleston project.

2. An oral contract can generally be made without formality. The absence of a written record is a matter of proof, not a legal requirement. Nevertheless, in a substantial commercial transaction the court should principally assess contemporary documents, electronic communications, and inferences from known or probable facts. Witness recollection remains relevant but requires caution. The guidance in Blue v Ashley [2017] EWHC 1928 (Comm), Edgeworth Capital (Luxembourg) S.A.R.L. v Aabar Investments [2018] EWHC 1627 (Comm), Gestmin SGPS S.A. v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) and UBS AG (London Branch) v Kommunale Wasserwerke Leipzig GmbH [2014] EWHC 3615 (Comm) was treated as valuable guidance, not as a rule that an oral commercial agreement could never be proved.

3. The alleged agreement was inherently difficult to reconcile with the documents. No agreement, side letter, email, or internal note recorded a fee of over £500,000, although formal non-disclosure agreements were prepared and signed. The handwritten note did not mention Rolleston, 18MW, OFGEM, accreditation, Avic UK’s liability, or the alleged £27 million basis. It was unsigned and undated. The later invoices, particularly the superseded invoice for £100,000 plus VAT, provided greater support for the defendant’s case.

4. The court preferred the evidence of Mr Lou and the defendant’s other witnesses to that of Mr O’Neill. Mr O’Neill had exaggerated his role, authority, and the supposed political intervention. The accreditation was in reality achieved principally through the legal work and representations of Simmons & Simmons and leading counsel. No separate issue concerning causation therefore required determination.

5. The court did not determine possible claims concerning future projects, alleged government agreements, the “coffee” project, or alleged breaches of the non-disclosure agreements. Mr O’Neill had expressly declined to pursue an alternative claim for reasonable remuneration, and there was no evidential basis for valuing such a claim.

The proceedings were issued against Avic UK and Avic International Holding Corporation. By amendment on 3 November 2017, the latter was removed, leaving Avic UK as the sole defendant. The claim was tried in the High Court before Mr Justice Freedman and was dismissed.