Mireille Raymond Salem & Anor v Faraj ("Freddy") Moussa Salem & Ors

A contractual promise to use reasonable endeavours to agree a future dispute-resolution process is unenforceable where the parties remain free to pursue their own interests and the contract supplies no meaningful objective standard by which their negotiations can be assessed.

Detailed proposals for a possible expert determination do not necessarily amount to a present agreement to submit the dispute to expert determination. The court must construe the language used, including whether the parties made the proposed process conditional on a further agreement. A contractual deadline normally governs where the wording makes it a cut-off date unless the parties agree a written extension.

The second claimant sought to lift a stay imposed by a Tomlin Order and enforce a 2016 Settlement Deed concerning the division of an African business. He sought a declaration that the parties remained obliged to use reasonable endeavours to agree a binding expert-determination process, or alternatively relief for breach of contract and an inquiry as to damages.

The first and second defendants argued that the relevant clause was an unenforceable agreement to agree. Alternatively, they argued that any obligation was limited to the period ending on 1 February 2017 and that no adequate case of breach or loss had been shown. The court addressed whether the clause was enforceable, whether it created a present obligation to submit to expert determination, and whether any obligation continued after the stated deadline.

1. Application dismissed. The stay imposed on the 2014 Claim was not lifted, and the claimant’s application was summarily determined against him.
2. The relevant clause required the parties to use reasonable endeavours to agree a binding process for an expert determination. It did not itself prescribe a sufficiently objective standard for assessing those endeavours. In negotiations between parties pursuing their own commercial interests, each party could reasonably take the position it considered best for itself, provided it did not mislead the others. The obligation was therefore no more enforceable than an agreement to agree. This conclusion was supported by Walford v Miles, Little v Courage Limited, Philip Morris v Swanton Care & Community Limited and Phillips Petroleum Co UK Ltd v Enron Europe Ltd.
3. The clause did not contain a separable present agreement to submit to expert determination. Its wording made an expert determination conditional on the parties first agreeing a binding process. The references to matters which the future agreement “might include” showed that even the basic decision to appoint an expert, and the method of appointment, remained open.
4. The clause was in any event time-limited. Unless extended in writing, the parties were required to agree a binding process by 1 February 2017. The general guidance in Astor Management A.G. v Atalaya Mining plc and others yielded to the contrary intention expressed by the clause.
5. Had it been necessary to decide them, questions concerning written extension, breach, and causation would not have been suitable for summary determination. They required further factual investigation, including consideration of the authority and role of intermediaries and advisers, the conduct of the various parties and trustees, and what would have happened absent any breach.