Conditions precedent and the contractual right to terminate

In Interserve Construction Ltd v Hitachi Zosen Inova AG [2017] EWHC 2633 (TCC) Jefford J held that the claimant was entitled to a declaration that the giving of notice to the claimant was a condition precedent to the exercise by the defendant of its right to terminate the contract pursuant to an express term of the contract. She reached this conclusion applying the general principles devised by the courts for the interpretation of contracts. She held that this was consistent with the natural meaning of the words ‘subject to’ as used in the contract. The use of the words ‘at its absolute discretion’ in relation to the issue of notification did not displace the natural meaning of the words ‘subject to’; rather, they simply emphasised that the question whether to give such a notice and commence the termination process was a matter for the defendant and a failure to do so did not have adverse consequences, such as lead to an inference that there had been a waiver of rights.