THE CONSTRUCTION OF TIME LIMITATION CLAUSES

BHP Petroleum Ltd v British Steel plc [2000] 2 Lloyd’s Rep 277

In BHP Petroleum Ltd v British Steel plc [2000] 2 Lloyd’s Rep 277 the Court of Appeal dismissed an appeal from the judgment of Mr Justice Rix (on which see our December 1999 issue, pp.1–4) in which he considered a number of points relating to the construction of a time limitation clause. The Court of Appeal was not asked to consider the meaning of ‘indirect or consequential’ damages on the ground that the proper interpretation of that phrase had been established by authority which was binding on the Court of Appeal (on which see our December 1999 issue and our July 2000 issue, pp.1– 4). But the Court of Appeal did uphold the conclusion of Mr Justice Rix to the effect that clause 17.5 did operate to terminate the liability of British Steel at the end of the 18 month warranty period. In so concluding the Court of Appeal placed emphasis on the commercial purpose which the parties had in mind when entering into the contract and refused to be drawn into a ‘tortured’ interpretation of the clause.