Risk-Allocation To Be Interpreted In Light Of What The Parties Reasonably Intended
Even, as in Mir Steel UK Ltd v Morris, [2012] EWCA Civ 1397, where the clause allocating that risk didn't clearly spell out how far it was intended to go. Mir Steel bought the assets of the insolvent Alphasteel, including a hot strip mill, knowing that the assets were subject to claims by Lictor Anstalt, which had assembled them. The asset purchase agreement provided in clause 9.5 that Mir Steel would be responsible for settling 'any claim' to the hot strip mill made by Lictor. Lictor later sued Mir Steel for conversion, inducing breach of contract and conspiracy by unlawful means. Mir Steel sought contribution from Alphasteel but was met with the argument that it was off the hook given the broad language of clause 9.5. The trial judge agreed.
Mir Steel argued on appeal that clause 9.5 should be interpreted more narrowly, along the principles set out in R v Canada Steamship Lines Ltd, [1952] AC 192 (PC (Can)), where it was held that express words were required in order to exclude claims for negligence. If express words were required with respect to negligence, Mir Steel contended, they should clearly be required to exclude the claims for intentional wrongdoing being made by Lictor. The English Court of Appeal pointed out that Canada Steamship should not be...
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