Agreement To Agree Enforceable As Part Of A Bigger Agreement

MRI Trading AG v Erdenet Mining Corp LLC [2012] EWHC 1988

Erdenet had contracted to sell MRI copper concentrates. Following disputes about the performance of the contract, the parties entered into a settlement agreement which provided for further deliveries under three future contracts, drafts of which were attached to the settlement agreement and signed by the parties. Erdenet complied with the first two contracts, but refused to deliver under the third. The third contract stated that the treatment charge, refining charge and shipping schedule "shall be agreed".

MRI brought proceedings for breach of contract. The arbitration tribunal concluded that it could only rely on the wording of the third contract when considering its interpretation and not the settlement agreement. As important information had not been agreed, the contract was unenforceable for lack of certainty. MRI appealed on the grounds that the settlement agreement should be considered when interpreting the third contract.

The High Court (Eder J) allowed the appeal and found in favour of MRI. When it comes to interpretation, each case had to be decided on its own facts. This case was unusual in that the third contract was entered into pursuant to and, in effect, formed part of the settlement agreement. It was therefore inappropriate to consider the third contract in...