ASTOR MANAGEMENT AND ANOTHER V ATALAYA MINING PLC AND OTHERS

[2017] EWHC 425 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Leggatt, 6 March 2017

Contract - Mining agreement obliging one party to secure senior debt finance by certain date or deferred compensation would become due - "Principle of futility" - Uncertainty

A mining agreement between the parties provided for deferred consideration for Astor when senior debt finance and permits had been secured to restart mining operations. In the event, finance had been secured by the defendant in alternative ways. Astor argued that the deferred consideration had become triggered by the grant of the permit, or that loans between the defendants (members of a group of companies) constituted senior debt finance. Alternatively, Astor argued that the defendants were in breach of their obligation of using all reasonable endeavours to secure senior debt finance. As a variant of this case, Astor argued that the defendants were in breach of implied obligations of good faith. The defendant argued that in circumstances where no senior debt finance had been obtained, there was no obligation to repay Astor. Further, the obligation to use all reasonable endeavours to secure senior debt finance was unenforceable; expired on 31 December 2010; or was complied with.