Judges Disagree Over Contract Interpretation - Again

Pink Floyd Music Limited and Another v EMI Records Limited [2010] EWCA Civ 1429

A dispute arose between Pink Floyd and its record company, EMI, over a number of issues. For the purposes of this bulletin, mention is made only of the dispute over a clause that prohibited EMI from selling "Albums" except in exactly the same form as delivered. As the court said, it was "difficult to extend [the clause] to digital recordings" and it was "not clearly drafted". The question arose whether this provision permitted EMI to sell Pink Floyd's songs online as single track downloads or ringtones.

Lord Neuberger and Laws LJ held that the purpose of the clause was to preserve the integrity of the albums and it would be perverse to imagine that the parties envisaged the integrity of the albums be rigidly controlled by Pink Floyd so far as they were physically recorded and distributed but that Pink Floyd would have no control whatsoever over the integrity of digital recordings and distribution. These two judges therefore construed the relevant provision in accordance with its purpose.

Carnwath LJ dissented. The prima facie assumption should be that words mean what they say. He gave a warning against too readily inferring that something had gone wrong with a commercial document, merely because...