GSP Fortuna Ltd v Dean International Trading SA

The written terms of the Sale Agreements are not in dispute. I set out an account of them taken largely from the Seller’s skeleton argument. For convenience only, it includes some of the observations made by the Sellers in relation to the written terms.

Each Sale Agreement was signed on behalf of the Sellers by Mr Gabriel Comănescu – the President and CEO of Grup Servicii Petroliere SA (“GSP”), the parent company of the Sellers. Each Sale Agreement was signed on behalf of Dean by Dr Alswadeh. The written terms of the Sale Agreements were materially identical except for price. The Sale Price for the Britannia Unit was US$21m. The Sale Price for the Fortuna Unit was US$66m.

Under both Sale Agreements, the stages for payment were as follows:

The Deposit was payable within 14 days of execution. The dates when the Intermediary Payment and the Closing Payment were to fall due would depend on when the parties agreed the Closing should take place. In that regard the date to be agreed for the Closing was to be no later than a defined Outside Date. The Intermediary Payment was to be made no later than 30 Business days before the Closing Date and the Closing Payment was to be made no later than 10 Business Days before the Closing Date.

The Deposit in each case was to be paid into the Seller’s Bank Account. This was an account held with Banca Commerciala Romana SA (“the Bank”).

Articles 3.2 and 3.3 stated:

3.2

Deposit. As security for the fulfilment of this Agreement, the Buyer shall, within ten (10) [sic] Calendar Days of the date of execution of this Agreement, pay to the Seller a deposit equal to [a specified sum amounting to 20% of the price] (the “Deposit”, which expression shall be interpreted as including any interest accrued thereon) in immediately available funds by wiring the same to the Seller’s Bank Account … . If the Deposit is not received in the Seller’s Bank Account, the Seller, at his discretion, may terminate the Agreement by simple written notice to the Buyer.

3.3

The Deposit shall be refunded to the Buyer in full only:

1.

if the Seller breaches a material term or condition of this Agreement and the Seller refuses or is unable to cure such breach within twenty (20) Business Days of the Seller’s receipt of written notice from the Buyer of the Seller’s alleged breach; or

2.

if the Unit suffers a Total Loss prior to Closing (unless caused by any member of the Buyer’s Group); or

3.

if required pursuant to Article 0 [sic] .

Otherwise, the Deposit shall be refundable less an amount of [a specified sum amounting to one half of the Deposit] which represents the “Liquidated Damages”.

By article 3.4.2 an Escrow Account was to be opened with the Bank within 30 days of signature of the Sale Agreement. It was to be:

… in the name of the Seller but operated by the bank according to the provisions of an escrow agreement to be entered into between the Seller, the Buyer and the Bank in its capacity of Escrow Agent (the “Escrow Agreement”).

The Intermediary Payment and Closing Payment were to be paid into the Escrow Account and were to be released by the Bank to the Sellers against specified documents which were to be provided at the Closing meeting.

Article 3.7 provided as follows:

If any part of the Sale Price is not received by the Seller in accordance with this Agreement, the Seller shall have the right to terminate this Agreement, in which case the Deposit shall be automatically forfeited by the Buyer with the amount of the Liquidated Damages.

Attached to each agreement were Technical Specifications concerning the relevant Unit, set out using an International Association of Drilling Contractors (“IADC”) format. The Sale Agreements also made provision for certification by the American Bureau of Shipping (“ABS”). Despite this, the Sellers said the Units were sold on an “As Is, Where Is” basis. In this regard they relied upon articles 2, 4.1, and 5.1(a):

I note at this point that article 5.1(a) was immediately followed by words which entitled Dean during the fortnight prior to Closing to put, subject to certain limitations, two representatives on board the Unit. These words were set out in article 5.1(b):

(b)

Following the payment of the Deposit in accordance

with Article 3.2, or earlier if mutually agreed between the Parties, and subject to them signing letters of indemnity, the Buyer shall have the right to put two (2) representatives on board the Unit at the Buyer’s own cost, risk and liability for a maximum period of 72 hours during the last two (2) weeks prior to the Closing. In the event the Closing of the sale and purchase of the Unit does not take place for any reason, the Buyer shall immediately remove, at the Buyer’s expense, any person the Buyer has placed on the Unit. Seller, acting reasonably, shall have the right to remove Buyer’s representatives for any reason and Buyer shall have the right to replace such representatives at Buyer’s cost.

Moreover, despite the use of the present tense in the words in article 5.1(a) italicised above, article 7.2(a)7 provided that it was at the Closing meeting for each Unit that the Sellers had to provide ABS Certificates.

In section F below I discuss the Sellers’ comments on article 5.1(b). As to article 7.2(a)7, the Sellers acknowledged that the effect of this was that they had to ensure that, by the Closing, each Unit would be in a condition such as to enable it to obtain a valid ABS Certificate which could be delivered at the respective Closing meeting.

As noted in section A1 above, the Closing meeting was to be held in Malta. The second sentence of article of 7.1.1 stated:

The Closing shall take place on 17 September 2012 (but not earlier than 90 days from the date when the Deposit is received in the Seller’s Bank Account) or such other date on or before the Outside Date as may be agreed in writing between the Parties.

At the Closing the Sellers were to provide the Bill of Sale for the Unit and other documents as specified in Article 7.2(a), including the ABS Certificate. Dean was to deliver various corporate documents as specified in Article 7.2(b). Simultaneously, Dean was also to release the balance of the Sale Price from the Escrow Account, by, among other things, executing and delivering the Certificate of Acceptance as provided in Articles 7.2 and 8.1.

The Sellers said that Closing was essentially a documentary process: if the Sellers provided the documents listed in Article 7.2(a), then Dean had to provide the documents listed in Article 7.2(b) and 8.1, which would release the Sale Price. The Sellers’ delivery of the Units was not a physical delivery to a designated location. Delivery would be accomplished by provision of the documents in 7.2(a), which would transfer title and the right to possession.

As noted above, under both Sale Agreements the Deposit was payable within 14 days of execution, i.e. by 15 July 2012.

The dates for the payment of the Intermediary Payment and the Closing Payment into the Escrow Accounts were dependent on the Closing Date under each Sale Agreement. Under Article 7.1.1 (see section C2.4 above), this would depend on when the Deposit was received, subject to the Closing Date being no later than the Outside Date. The Outside Date – i.e. the latest possible date for the Closing Date – was defined as “17 October 2012 (but in any case not earlier than 120 days from the date when the Deposit is received by the Seller in the Seller’s Bank Account).”

By Article 7.1.2, the parties agreed that, if the Sellers anticipated that “…the Unit will not be ready for delivery by the Outside Date, they may notify the Buyer in writing stating the date when they anticipate that the Unit will be ready for delivery and propose a new Outside Date.” Dean had the option to terminate the Sale Agreement within ten Business Days of receipt of such written notification. However, if Dean did not declare such option within the time prescribed, the date proposed in the Sellers’ notification “shall be deemed to be the new Outside Date.”

The Sellers said that Dean’s obligations to complete the transactions to be performed by it in connection with the Closing were subject only to the conditions precedent set out in article 6.1 – i.e. the representations in article 4.3 (which are not in issue).

The Sellers’ obligations to carry out the transactions to be performed by them in connection with the Closing were subject to the conditions precedent set out in Article 6.2 – i.e. including payment by Dean of the Deposit, the Intermediary Payment and the Closing Payment.

Article 7.3 stated:

7.3

Outside Date

(a)

In the event that the Closing does not occur on or before the Outside Date, for not receiving the Intermediary Payment or Closing Payment in the Seller’s account caused by whatever reason, the Seller may terminate this Agreement by providing written notice to the Buyer, in which case (i) the Liquidated Damages as agreed in Clause 3.3 shall be retained by the Seller and (ii) save in relation to claims under Articles 10.1(a) and/or 10.2(b) [which were concerned with indemnity for damages in connection with injury, illness or death] neither Party shall have any claim of whatsoever nature against the other, and (iii) the refundable part of the Deposit, and ;the Intermediary Payment (if it would have been paid by that time by the Buyer and received by the Seller) shall be reimbursed to the Buyer.

(b)

In the event that the Closing does not occur on or before the Outside Date by reason of the Seller not delivering the Unit in accordance with this Agreement and this Agreement is terminated in accordance with paragraph 7.3(a) above, the Deposit and the Intermediary Payment (if it would have been paid by that time by the Buyer and received by the Seller) shall be paid to the Buyer as soon as practicable thereafter and (save in relation to claims under Articles 10.1(a) and/or 10.2(b)) neither Party shall have any claim of whatever nature against the other.

(c)

For the avoidance of doubt the Buyer has the right to terminate this Agreement only after the Outside Date.

The Sellers commented in their skeleton argument:

Article 7.3 was headed “Outside Date” but was actually concerned with the consequences of the Closing not occurring by the Outside Date. … The provision does not allow for the possibility that the Closing might not occur for a combination of these reasons. On the Sellers’ case, this was logical, in the light of Article 6.2 [see section C1.6 above]. Non-payment of the Intermediary Payment or the Closing Payment was a condition precedent to the Seller’s obligation to proceed with the Closing. Accordingly in the event of non-payment by Dean, the cause of the Closing not occurring was, by definition, Dean’s non-payment.

Article 7.4 has been described as an ‘En Bloc’ provision. It stated:

7.4

En Bloc Sale

(a)

The sale and purchase of the Unit forms part of an en bloc sale and purchase of [the other Unit] pursuant to [the other Sale Agreement]. Sale and purchase of the Unit is subject to and shall take place simultaneously with the Sale and Purchase of [the other Unit].

(b)

In the event that Closing does not occur under [the other Sale Agreement] other than the Seller’s breach, the Seller may terminate this Agreement by providing written notice to the other in which case (i) (save as provided in paragraph (c) below) the non refundable part of the Deposit, together with any interest accrued thereon shall be retained by the Seller and (ii) neither Party shall have any claim of whatsoever nature against the other and (iii) the refundable part of the Deposit, and the Intermediary Payment (if it would have been paid by that time by the Buyer and received by the Seller) shall be reimbursed to the Buyer.

(c)

On the event that Closing does not occur under [the other Sale Agreement] by reason of a breach of this Agreement or [the other Sale Agreement] by the Seller the Buyer may terminate this Agreement by providing written notice to the other, in which case this Agreement is terminated in accordance with paragraph 7.4(b) above.

Article 15.1 was an entire agreement clause, while article 17.3 dealt with amendment or addition. These provisions stated:

15.1

This Agreement, and any documents referred to in it,

constitute the entire agreement between the Parties and supersede any arrangement, understanding or previous agreement between them relating to the subject matter they cover. Each Party acknowledges that in entering into this Agreement, and any documents referred to in it, does not rely on, and shall have no remedy in respect of, any statement, representation, assurance or warranty of any person other than as expressly set out in this Agreement or those documents. Nothing in this Article 15 operates to limit or exclude any liability for fraud.

…

17.3

No amendment or addition to this Agreement shall be valid

unless agreed in writing by each of the Parties hereto.

There were two sets of written amendments to the Fortuna Sale Agreement. They are described in sections C4 and C5 below.

I discuss in section C6 below the extent to which there were written amendments to the Britannia Sale Agreement.

The Fortuna Sale Agreement was amended by a written agreement contained in two letters exchanged between the parties and dated 27 June 2012 and 3 July 2012. In these letters the parties agreed that the Intermediary Payment was payable 14 Business Days before the Closing Date and that the Closing Payment was payable 7 Business Days before the Closing Date.

The Fortuna Sale Agreement was further amended by an Addendum signed between the parties on 14 July 2012. By this addendum the purchase price for the Fortuna Unit was increased to US$67,000,000. In consequence the Deposit was increased to US$13,400,000, the Liquidated Damages were increased to US$6,700,000, the Intermediary Payment was increased to US$46,900,000 and the Closing Payment was increased to US$6,700,000. Thus the increased Liquidated Damages agreed between the parties remained 10% of the increased purchased price for the Fortuna Unit.

The Addendum to the Fortuna Sale Agreement also deleted Article 7.4, i.e. the ‘En-bloc’ provision.

It was said at paragraph 25 of Page 1 that there were no amendments to the Britannia Sale Agreement. This contrasts with Dean’s case (see section A1 above) that the Britannia Sale Agreement was mutually abandoned. A question may also arise as to whether, prior to the alleged abandonment, the first amendment to the Fortuna Sale Agreement was an amendment which was agreed for the Britannia Sale Agreement as well. Dean’s letter dated 27 June 2012 was addressed to both GSP Fortuna and GSP Britannia. On one reading of the letter it is describing an agreement reached in Istanbul in relation to both Units at a meeting with Mr Alireza Shahriary on behalf of the Sellers, and seeks confirmation of that agreement. It is true that the letter in reply dated 3 July 2012 is signed only on behalf of GSP Fortuna. But this does not of itself rule out the possibility that at the meeting in Istanbul agreement was reached as regards both Units. For present purposes it may not matter.

The point that the Sellers sought to make was that the En Bloc provision in article 7.4, while it was deleted from the Fortuna Sale Agreement on 14 July 2012 pursuant to the Addendum to that Sale Agreement, was not amended in relation to the Britannia Sale Agreement. It is not suggested by Dean that the Addendum applied to the Britannia Sale Agreement. Dean’s case is that what happened on 14 July 2012 was pursuant to an oral agreement under which, in exchange for GSP Britannia agreeing to abandon the Britannia Sale Agreement, Dean agreed (among other things) to pay the amounts specified in the Addendum to the Fortuna Sale Agreement.

On 25 June 2012 each of GSP Fortuna and GSP Britannia entered into a separate written brokerage agreement with Dean Legal Consultancy FZE (referred to in the agreement as “the Broker”). I shall refer to the agreement made by GSP Fortuna as “the Fortuna Brokerage Agreement”, and to that made by GSP Britannia as “the Britannia Brokerage Agreement”. Each Brokerage Agreement was signed on behalf of the Seller by Mr Comănescu, and on behalf of the Broker by Dr Alswadeh. Each provided for payment to the Broker of a Brokerage Commission “in full… upon closing of a definitive transaction and within ten (10) days after the sales proceeds had been made fully available to …Seller’s bank account as it will be defined in the sale purchase agreement of the asset …”

In the case of the Fortuna Brokerage Agreement the amount of the Brokerage Commission was US$1 million. In the case of the Britannia Brokerage Agreement the amount of the Brokerage Commission was US$500,000.

It is common ground that both Brokerage Agreements were terminated on 14 July 2012. In the case of the Fortuna Brokerage Agreement this was recorded in a written “First Addendum”. It stated that the Fortuna Brokerage Agreement was terminated, with no fees, commission or any other type of amount due or owing or that might at any time become owing to the Broker.

It is not in dispute that the Britannia Brokerage Agreement came to an end in a similar way.

Factual assertions and evidence

I begin with the account given, in the witness statement that I have referred to as “Page 1”, in support of the application for summary judgment. In section A of Page 1 Ms Page explained that in making that statement she relied on documents which she exhibited, on her general knowledge of the matter, and on information provided to her by the Sellers. Section A also gave a summary of the claims.

Section B of Page 1 explained that the Units are both cantilever jack up drilling rigs. The Fortuna Unit was built in 1984. The Britannia Unit was built in 1968. Prior to June 2012 they were both in poor condition and were about to undergo refurbishment in repair yards. At the time the Units were not in the condition required by Class (ABS). The refurbishment was intended to ensure that both Units could achieve clean Class Certificates from ABS.

Paragraph 6 of Page 1 stated:

The Defendant expressed interest in buying the Units. It was allowed to inspect both Units and negotiations proceeded on commercial terms. …

Section C of Page 1 described the terms of the Sale Agreements and the amendments to the Fortuna Sale Agreements. It was at this point that Ms Page said, in paragraph 25 of Page 1:

There were no amendments to the Britannia Agreement.

Section D of Page 1 turned to Dean’s failure to pay under the Fortuna Sale Agreement. Ms Page stated that the Deposit in respect of the Fortuna Unit was paid on 18 July 2012. The consequence was that the earliest the Closing Date could be was 16 October 2012 (i.e. 90 days after payment of the Deposit) and the Outside Date was postponed from 17 October 2012 until 15 November 2012 (i.e. 120 days after payment of the Deposit). The latest the Closing Date could be therefore was also 15 November 2012.

Ms Page commented that accordingly, the latest possible permitted date for payment of the Intermediary Payment was 28 October 2012 (i.e., applying the amendments in the Addendum to the Fortuna Sale Agreement, 14 Business Days before the latest possible Closing Date) and the latest possible permitted date for payment of the Closing Payment was 6 November 2012 (i.e., on a similar basis, 7 Business Days before the Closing Date).

At this point Ms Page noted something which is common ground, namely that Dean did not pay the Intermediary Payment by 28 October 2012.

The next event described by Ms Page was the sending by GSP Fortuna to Dean of a letter invoking the provisions of article 7.1.2 (see section C2.5 above). This, Ms Page said, had the consequence that the Outside Date was put back to 20 November 2013 (“the Extended Outside Date”). She added that because Dean did not declare its option under article 7.1.2 (i.e. the option, within 10 business days of receipt of the letter, to terminate the Fortuna Sale Agreement) the Extended Outside Date had the consequence that the latest possible permitted date for payment of the Intermediary Payment was 31 October 2012 (i.e. 14 Business Days before the latest possible Closing Date) and the latest possible permitted date for payment of the Closing Payment was 9 November 2012 (i.e. 7 Business Days before the Closing Date).

Ms Page then noted that Dean had not paid the Intermediary Closing Payments by those dates. She went on to explain that a letter dated 12 November 2012 from GSP Fortuna gave Dean until 14 November 2012 to make the payments. Again (as is common ground) payment was not made.

Ms Page asserted that a valid ABS certificate in respect of the Fortuna Unit was issued on 20 November 2012.

Ms Page concluded section D of Page 1 by noting that on 3 December 2012 GSP Fortuna sent a letter to Dean in accordance with article 3.7, terminating the Fortuna Sale Agreement as a result of Dean’s failure to pay the Intermediary Closing Payments on the dates due or at all.

Section E of Page 1 gave more detail about GSP Fortuna’s claim under the Fortuna Sale Agreement. She noted that the particulars of claim sought both liquidated damages under article 3.7 and damages for further losses. She summarised the defence as being:

that GSP Fortuna failed to refurbish the Unit and have it ready for delivery on the dates stipulated in the Agreement and failed to comply with its obligations.

Ms Page summarised GSP Fortuna’s answer on the facts. It would say, if necessary, that by 20 November 2012 the Fortuna Unit was in accordance with the technical specification and with a valid ABS Certificate. She said that if Dean had paid the Intermediary Closing Payments then GSP Fortuna would have been able to proceed with the Closing on 20 November 2012 and would have done so.

Ms Page recognised that GSP Fortuna’s factual answer included issues that might not be suitable for summary judgment. In the remainder of section E she set out observations on certain aspects of the legal position.

Turning to the Britannia Unit, section F of Page 1 dealt with Dean’s failure to pay. Ms Page said that because Dean failed to pay the Deposit GSP Britannia did not proceed with the refurbishment of the Britannia Unit.

Ms Page added that on 3 December 2012 GSP Britannia wrote to Dean terminating the Britannia Sale Agreement. The termination was the result of two things. The first was Dean’s failure to pay any of the sums due under the Britannia Sale Agreement. The second was that what had happened in relation to the Fortuna Unit had the consequence that the ‘En-Bloc’ provision in article 7.4 of the Britannia Sale Agreement applied.

Section G of Page 1 noted that Dean in its defence made an allegation that the Britannia Sale Agreement was abandoned by the Parties. As to that, Ms Page stated in paragraph 43 of Page 1:

There is absolutely no basis for this allegation: the Britannia Agreement remained in force, without any amendment or Addendum and the Defendant therefore remained legally bound by its terms. In particular, the Defendant’s pleaded allegation that the Addendum to the Fortuna Agreement had any effect on the Britannia Agreement (let alone the effect that the Defendant did not have to pay any of the sums due) is plainly inconsistent with the terms of the Addendum.

Section H of Page 1 asserted that, in the circumstances, it was clear that Dean had no real prospect of successfully defending the liquidated damages elements of the claim or succeeding in bringing its counterclaim, and there was no other reason why the disposal of the liquidated damages element of the matter should await trial.

In opposition to the application for summary judgment Dean lodged Alswadeh 1. In that witness statement Dr Alswadeh said that he had initially approached Mr Comănescu in relation to the purchase of the Fortuna Unit only. That was because Dean had a secured and specific requirement from a Chinese end user for a rig with the technical specification of the Fortuna Unit. Mr Comănescu had suggested, in negotiations in Istanbul in May 2012, that a good deal could be done by including the Britannia Unit. Dr Alswadeh explained that after some argument about the price he made an offer for the two Units of US$87 million. He intended in that regard to “on-sell” the Britannia Unit. GSP had accepted that offer the following day.

At paragraph 15 of Alswadeh 1 Dr Alswadeh added:

Before we signed the Fortuna agreement, my team of engineers inspected the Fortuna rig. No similar inspection of the Britannia rig ever took place.

In paragraphs 16 to 20 Dr Alswadeh explained that the inspection of the Fortuna Unit took place around 5 June 2012. The team of engineers had a first draft of the Technical Specification. Suggested amendments were identified by the team of engineers. A response by GSP Fortuna was the subject of further discussions, leading to the final version attached to the contract. Dr Alswadeh made the point that the engineers could not, in June 2012, know whether the Fortuna Unit would comply with the agreed specification at Closing.

In paragraphs 21 to 29 Dr Alswadeh dealt with the terms of the agreements. He made reference to a sentence which had been proposed for Article 2 of the Fortuna Sale Agreement but did not appear in the final version. He then turned to the passage in Article 2 of both Sale Agreements referring to the sale being on an “as is where is” basis. In that regard, Dr Alswadeh asserted that compliance with the Technical Specification and ABS Certification at the time of Closing “was a condition for payment in respect of each vessel.” He added that:

In order to make the contract work it was and remains my view that the terms of the sales agreement entitled me to inspect the vessels prior to instalment or closing payments in order to determine if the works.

The sentence quoted above was obviously incomplete. It was, however, explained in the following paragraph in this way:

… in my view the sales agreements only make commercial sense if Dean was allowed to inspect the vessels during their refurbishment and upgrade to check on progress.

In this section of Alswadeh 1, Dr Alswadeh noted that the ABS Classification Certificate could not have been in existence on 25 June 2012, and asserted that nothing in Articles 4.1 or 5.1 of the Sale Agreements (see section C2.3 above) restricted Dean’s rights to inspect the vessel prior to delivery to check on progress.

In paragraphs 30 and 31 Dr Alswadeh dealt with the Brokerage Agreements. He then turned in paragraphs 32 to 39 to deal with the variations to the Fortuna Sale Agreement. The negotiations for the variations had, said Dr Alswadeh, taken place on behalf of Dean and the Sellers respectively between Mr Reza Tabatabaei and Mr Alireza Shahriary, who had spoken by telephone in Persian.

In those paragraphs and at paragraphs 40 to 49, Dr Alswadeh gave his account of the abandonment of the Britannia Sale Agreement. He said that he had been informed that the on-buyer of the Units from Dean was no longer willing or interested in procuring the Britannia Unit. He added in paragraph 38:

On the basis of negotiations between the on-buyer and GSP they had agreed to separate the two contracts, for the purchase of the Fortuna and Britannia units.

At paragraph 39 Dr Alswadeh said this:

Accordingly on 14 July 2012 Dean and Fortuna agreed an amendment which provided for the separation of arrangements in respect of the Fortuna and Britannia units which was reflected partly in the Addendum agreed between Dean and each of GSP Fortuna and GSP Britannia of 14 July 2012 … . On 14 July 2012, I also signed an agreement terminating the brokerage agreements between Dean Legal and GSP Fortuna … and GSP Britannia.

Dr Alswadeh explained the commercial intention and result in paragraphs 40 and 41:

40.

Basically, the intention of these arrangements was that in exchange for GSP agreeing to abandon the Britannia contract, Dean agreed to pay an extra US$1m for the Fortuna rig, and to the abandonment of the two brokerage agreements, referred to above. As a consequence Dean suffered a loss in commission of US$1.5m.

41.

The total benefit to the GSP group of companies, as a result of the abandonment of the Britannia contract, was therefore US$2.5m, which is more than the deposit now claimed for the Britannia contract.

Observations made by Dr Alswadeh at paragraphs 42 to 49 of Alswadeh 1 included the following:

As to what actually happened to the Britannia Unit, in a later section of Alswadeh 1, Dr Alswadeh explained that arrangements had been made for Mr D. G. A. McKenzie BSc., CEng., a naval architect and Fellow of the Royal Academy of Engineering, to review such documentation as was available and to prepare a draft report. Mr McKenzie had extensive experience in relation to the reactivation, repair and upgrade of all types of rigs. On the basis of the limited documentation provided to him Mr McKenzie had concluded that there was no evidence that any reactivation, refurbishment or upgrade works had been carried out on the Britannia Unit until after November 2012. Claims for expenses in relation to that Unit all appeared to have been incurred between November 2012 and July 2013.

Turning to the Fortuna Unit, Dr Alswadeh exhibited a substantial amount of correspondence, primarily in the form of copy emails. These recorded an inspection visit to the Fortuna Unit by engineers appointed by Dr Alswadeh. The inspection had begun on 22 September 2012 and lasted 4 days. The correspondence also included progress reports on the state of the work to the Fortuna Unit. In that regard Dr Alswadeh referred to reports which had been provided to Dean, including an action plan emailed on 11 September 2012, a further action plan emailed on 10 October 2012, and a report on procurement status emailed on 15 October 2012.

In that regard Dr Alswadeh commented at paragraph 52 of Alswadeh 1:

I do not understand why GSP Fortuna was prepared to agree either to the provision of an inspection nor to the production of progress reports if it really considered that it had no obligation to Dean in relation to the compliance of the rig with her specification and quality of the work done on the rig.

At paragraph 53 of Alswadeh 1 Dr Alswadeh said he had attempted to gain further inspections. Those attempts however were consistently rejected on the grounds that Dean was not contractually entitled to inspect the Unit. In subsequent paragraphs Dr Alswadeh added:

Turning to what actually happened on the Fortuna Unit, Dr Alswadeh referred to the draft report of Mr McKenzie (mentioned earlier in relation to the Britannia Unit). This, and answers to requests for further information, suggested that the majority of the work allegedly undertaken on the Fortuna Unit was in fact undertaken after 3 December 2012.

Mr McKenzie’s report was exhibited by Dr Alswadeh. As regards the Fortuna Unit, paragraphs 8.2 and 8.3 stated:

8.2

“GSP Fortuna”

8.2.1.

A version of the GSP Fortuna Action Plan, dated 18

July 2012,indicated project completion by 15 October

2012.

The latest available version of the Action Plan

is dated 9 October 2012. This shows a large

proportion of work items at 50% complete, or less and

makes no prediction of project completion date. Based

on the relative status of work between the two versions

of the Action Plan, and extrapolating forward, it looks

unlikely that the work would have been completed

until late 2012.

8.2.2.

An ABS Certificate of Classification was issued on 20

November 2012. The copy provided of the Certificate

of Class was incomplete and there were no details of

Conditions of Class that may have been relevant to the

Certificate. Award of a Certificate of Class does not

indicate that the Unit was fully reactivated, fit for

purpose and in a state of readiness to commence

drilling operations. It only indicates that the Unit is

structurally sound, seaworthy and in compliance with

marine safety criteria.

8.2.3.

The alleged costs of $2,251,342.94 for hull repairs,

$340,400.76 for cleaning and coating legs,

$850,168.30 for ABS-related tests and trials appear,

from the budget and payment detail sheets, to be part

of the refurbishment and reactivation of the Unit.

They are roughly in line with the level of cost to be

expected for refurbishment and reactivation project for

a drilling unit of this type and age.

8.2.4.

The alleged cost of $4,202,061.64 for replacement

equipment appears to consist mainly of replacement,

refurbishment and reactivation costs to existing

equipment, rather than any upgrades. The above sum

may also include the value of the equipment stored at

Constanta. There is no clear indication from the

budget and payment detail sheets that any upgrades are

included in this sum.

It is not clear where , if at all, the costs of the upgrades

listed at 7.2.2. above are shown. Likewise, there are

no clear entries in the budget and payment detail sheets

for any of the other highlighted items in the TS (e.g.

drilling tubulars, handling tools, burner heads,

etc.).

The estimated total value of the highlighted items in

the TS in £4.5 - 6.5 Million, assuming the purchase of

new equipment and utilising the shipyard for

installation assistance. This could reduce to, say, $2.5

- 4.5 million if second-hand equipment was procured.

The mismatch of the $4.2 million and the similar (or

higher) amount for the TS additions, together with the

absence of most of the TS additions from the Action

Plan, Procurement Status Report and the budget / cost

sheets leads to the possibility that not all of the

additional TS items were actually installed on the Unit.

8.3

Conclusion

In conclusion, based on the information available, it is

questionable whether either the GSP Britannia or the

GSP Fortuna would have been fully in compliance

with their respective Technical Specifications, at their

respective Closing Dates, or at all.

In Page 2 Ms Page responded to what she believed to be the more salient points arising from Alswadeh 1. Generally, as regards Dr Alswadeh’s account of negotiations she commented that his evidence would appear to be irrelevant and inadmissible. She nevertheless said at paragraph 16 of Page 2:

In case it matters, the Claimants’ case as to how the Fortuna Agreement came to be varied by the Addendum of 14 July 2012 is that, when it became clear that the Defendant was unlikely to pay the Deposit for the Fortuna Unit by the due date of 15 July 2012, GSP Fortuna was prepared initially to allow the Defendant further time to organise the payment. This was subject to GSP Fortuna being compensated for the delay. Consequently, GSP Fortuna increased the price for the rig from US$ 66m to US$ 67m. As a result, on 14 July 2012 GSP Fortuna and the Defendant signed the Addendum to the Fortuna Agreement by which the Sale Price for the rig was increased.

After summarising Dean’s case as to the abandonment of the Britannia Sale Agreement, in paragraphs 17 to 20 of Page 2 Ms Page noted, among other things:

At paragraph 21 Ms Page said this:

GSP Fortuna’s understanding at the time was that the Defendant wanted to raise finance for the purchase of the Fortuna Unit independently from raising the finance for the Britannia Unit. This necessitated the termination of the Brokerage Agreements on 14 July 2012, because Dean was no longer a broker, but rather was buying directly. The deletion of the ‘en-bloc’ clause in the Fortuna Agreement was meant to assist the Defendant in financing the purchase of the rig. The ‘en-bloc’ clause remained in the Britannia Agreement, because the pricing for the two rigs remained linked and they were still to be sold together as a package to the Defendant. Were the ‘en-bloc’ clause deleted from the Britannia Agreement and the Britannia Agreement abandoned as alleged by the Defendant, Mr Comănescu would have substantially increased the price of the Fortuna Unit.

Ms Page then turned, in paragraph 22 of Page 2, to deal with demands for payments under the Britannia Sale Agreement. She referred to email exchanges on 18 July 2012, in reliance upon which she said that GSP Britannia had pressed for payment of the Deposit, in the context of Dean’s request for inspection. She added:

GSP Britannia’s efforts did not go beyond this because it was the only pressure-point that was available to it short of litigation and because the Defendant could not even meet its payment obligations under the Fortuna Agreement as evidenced by the late payment of the Deposit and by the failure to pay the Intermediary and Closing payments. The Claimant did not demand the payments of the Intermediary and Closing Payments under the Britannia Agreement, because the dates for their payment depended on the payment of the Deposit which never took place. When eventually it became clear to the Claimants that the Defendant could not meet its obligations even under the Fortuna Agreement, the Claimant terminated both Agreements on 3 December 2012.

The remainder of Page 2 dealt with the Fortuna Unit. It was, said Ms Page, “unsustainable” to claim that the Sale Agreements made commercial sense only if Dean were allowed to inspect the rigs during their refurbishment. In a purchase on an “As Is Where Is” basis the purchaser relied solely on the available documentation. An example cited by Ms Page was when the Sellers had themselves bought the Fortuna Unit and the Britannia Unit. Their representatives had been allowed on board the rigs but were not allowed to open any doors or carry out any detailed inspections or tests.

As to Dean’s inspection of the Fortuna Unit, Ms Page produced records which she said showed that Dr Alswadeh had personally co-ordinated a visit by four individuals for a period of 23 days from 22 September until and including 14 October 2012. She asserted that this visit was:

Only due to GSP Fortuna’s goodwill rather than contractual obligation …

Ms Page noted that after the Intermediary Payment was not received by its due date of 28 October 2012, in letters dated 4 November 2012 and 12 November 2012 GSP Fortuna had been prepared to offer additional time for Dean to make the Intermediary Payment and the Closing Payment. Ms Page noted that under the Fortuna Sale Agreement the payments in question would have been placed into an Escrow Account to which GSP Fortuna would not have access until the day of Closing, and then only after both parties had signed a Payment Instruction. Moreover the Sale Agreement provided for automatic return of these payments if the Payment Instruction were not received by 31 December 2012. Ms Page affirmed that if the Intermediary Closing Payments had been made on time and as requested, Dean would have been allowed in accordance with article 5.1(b) of the Fortuna Sale Agreement, to put two representatives on board the Fortuna Unit for a maximum of 72 hours during the last two weeks prior to Closing on 20 November 2012.

As to Dean’s further requests to inspect the Fortuna Unit in November 2012, Ms Page referred to exchanges showing that access had been refused because Dean had not complied with its contractual obligations.

As to the 20 containers in Constanta Ms Page said that they contained spare parts and equipment to be transferred to Tulza at Closing, but not required for the purposes of the ABS Certificate. There had been a conversation between Mr Shahriary and Dr Alswadeh as to whether the containers should be transported to Dubai. This could have been arranged by the Seller, but Dean stated that it would use other arrangements. Ms Page said that accordingly the agreement was to make the containers available at Tulza on Closing. As Closing had not occurred the 20 containers remained in Constanta.

Ms Page then turned to Dr Alswadeh’s assertion that the majority of the works on the Fortuna Unit were undertaken after 3 December 2012. In that regard Ms Page dealt with two matters:

Ms Page concluded Page 2 by dealing with what Mr McKenzie had said about the ABS Certificate:

In any event, Ms Page repeated paragraph 38 of Page 1 (where she had set out aspects of the Fortuna Sale Agreement).

In response to Page 2, Dr Alswadeh in Dean 2 dealt with two matters. The first concerned Ms Page’s statement of the Seller’s understanding in July 2012 that the reason for the cancellation of the Brokerage Agreements on 14 July 2012 was that “Dean was no longer a broker, but was buying directly”. Dr Alswadeh said that that was not correct, and maintained that he had correctly set out the reasons for cancellation of the Brokerage Agreements in paragraph 40 of Alswadeh 1. Dr Alswadeh added:

The defendant intended to buy both rigs in June 2013. As to the Britannia rig, in July 2012 the defendant agreed to abandon the purchase. As to the Fortuna rig, the defendant was buying it for a third party; that never changed.

Second, Dr Alswadeh added to what he had said in Alswadeh 1 about the negotiations in July 2012:

I had authorised Mr Tabatabaei to carry out the negotiations referred to in paragraph 37, and to reach the agreement referred to in paragraph 40, on behalf of the defendant. My understanding is that in July 2012 Mr Tabatabaei, on behalf of the defendant, reached an agreement with Mr Alireza Shahriary, on behalf of GSP Britannia Ltd, that the contract for the purchase of the GSP Britannia was to be abandoned. My understanding was that Mr Alireza Shahriary was negotiating, and reached this agreement, on behalf of GSP Britannia Ltd, and had that company’s authority to reach this agreement.

The Britannia liquidated claim

Dean’s defence to the Britannia liquidated claim, as put forward by Dr Alswadeh, is that the Britannia Sale Agreement was abandoned in accordance with an oral abandonment agreement made in telephone conversations between Mr Shahriary on behalf the Sellers and Mr Tabatabaei on behalf of Dean. In the Sellers’ skeleton argument it was recognised that there were issues of fact which could not be decided summarily. However, even assuming that there had been telephone conversations as asserted by Dean, the skeleton argument identified four reasons why this would not give rise to an abandonment agreement binding on GSP Britannia.

The skeleton argument, in relation to all four reasons, submitted that the issues had to be addressed in the light of article 17.3. That article expressly required any amendment or addition to the Britannia Sale Agreement, in order to be valid, must be agreed in writing by each of the parties. As is now established (see World Online Telecom v I-WAY [2002] EWCA Civ 413) such a provision is not conclusive. Nevertheless, citing Virulite v C Virulite Distribution [2014] EWHC 366 (QB) at [55] [60], it was submitted that clear evidence was likely to be required. In this regard, the fact that the case set out by Dr Alswadeh was not the case pleaded in the defence was said to be highly relevant. As to that, however, I cannot form a view at this stage that there will be no sufficiently clear evidence at trial supporting Dr Alswadeh’s account. I acknowledge that questions may arise at a trial as to whether the things allegedly said in the telephone conversations were in fact said. In the context of an application for summary judgment the skeleton argument was right, as it seems to me, to address the matter on the assumption that those things were indeed said. The current state of the law concerning provisions of the kind found in article 17.3 does not in my view significantly assist GSP Britannia at the summary judgment stage.

Turning to the first of the four reasons, it was observed that the Sale Agreements, the Brokerage Agreements, the Addendum to the Fortuna Sale Agreement, and the Addendum to the Fortuna Brokerage Agreement, were all in writing. The parties took the trouble to set out their agreements in formal documentation. No such documentation was drawn up to amend the Britannia Sale Agreement. Dr Alswadeh’s evidence that arrangements for the purchase of the Britannia Unit had been abandoned was, it was submitted, inadmissible evidence of his own subjective belief.

I do not consider that these matters show that there is no realistic prospect of showing at trial that there was an abandonment agreement binding upon GSP Britannia. Dr Alswadeh has set out in both Alswadeh 1 and Alswadeh 2 the grounds for his belief. It is true that on other occasions the parties set out their agreement in formal documentation. It does not follow that there can have been no binding oral agreement on this occasion.

The second reason relies on emails and letters which can be divided into three groups. First, there are exchanges prior to 14 July 2012 in which Dr Alswadeh said Dean was looking to maintain the inspection of the Britannia Unit, albeit in the context of a separation between the purchasing of the two Units. However nothing in this material is inconsistent with an agreement to abandon being reached in the later negotiations on 14 July. The second group concerns emails passing between the parties after 14 July 2012. They make reference to arranging an inspection of the Britannia Unit. Certain of the emails make reference to arrangements for payment. The references to inspection at this stage appear to me on their face to be potentially consistent with Dr Alswadeh’s account under which at this stage he was looking to do a deal on behalf of a new purchaser. Certain of the emails are indeed copied to that purchaser. In those cases where the emails deal with arrangements for payment Dean’s case is that they are concerned with payment in relation to the Fortuna Unit. Again, it seems to me that the emails are potentially consistent with that case. In his oral reply Mr Bright drew attention to certain emails having as a subject line “GSP Britannia”. The presence of that subject line is not necessarily inconsistent with references in emails to payment nevertheless being in relation to the Fortuna Unit. The third group of emails do not appear to have involved Dean and for that reason cannot in my view offer substantial assistance to the Sellers on the present application.

The third reason, which was the reason most strongly urged by Mr Bright in oral submissions, was that Mr Shahriary had no authority to bind GSP Britannia. All the documents sent out by the Sellers, not just agreements but also letters and emails, were signed by Mr Comănescu. Mr Shahriary was merely head of a company which had a marketing contract with GSP. He never purported to send emails on behalf of GSP. He was chairman and general director of a separate company known as Petromad. Whenever he sent an email he signed that email in his capacity of chairman and general director of Petromad. He had prepared documents to set out the parties’ agreement in the form of Addenda, but these were not to be signed by him on behalf of the Sellers: they were to be signed by Mr Comănescu. Dr Alswadeh had said that his understanding was that the Sellers were both run by Mr Comănescu. No reasons had been given to believe that Mr Shahriary had authority to conclude an agreement on behalf of GSP Britannia. Nor had there been any evidence that Dr Alswadeh believed this.

In answer to this third reason, Dean said that the evidence at the present stage suggests that the instructions provided by the Sellers to Ms Page are false. There had been no witness statement by either Mr Comănescu or Mr Shahriary. There was a stark contrast between the repeated requests for payment in relation to the Fortuna Unit and the silence during the extended period in relation to any allegedly outstanding payment concerning the Britannia Unit. The notion that the additional $1 million under the Addendum Fortuna Sale Agreement was compensation for lost interest was absurd: it would equate to an interest rate of 7.57 percent for three days or 922 per cent per annum. It was also inconsistent with a letter dated 12 November 2012 in which the Sellers maintained that they had reserved their rights to complain of delay in payment of the Deposit. Similarly, the suggestion that the Brokerage Agreements had been terminated because Dean was “no longer a broker, but was buying directly” was a matter of considerable doubt.

No satisfactory answer to these submissions was advanced by Mr Bright in his reply on behalf of Sellers. It seems to me that the account of events given by Dr Alswadeh necessarily involves conduct on the part of the Sellers over a period of months which, if established, would arguably be consistent only with the Sellers having agreed to abandonment of the Britannia Sale Agreement.

The fourth and last reason given was an assertion that Mr Tabatabaei had no authority to act on behalf of Dean. I do not see how this could be established on the evidence available at the present stage, and it was rightly not pressed by Mr Bright in his oral submissions.

For these reasons, I conclude that summary judgment cannot be granted in favour of GSP Britannia.

The Fortuna liquidated claim

Dean puts forward two answers to the Fortuna liquidated claim. Its primary answer is that it has a real prospect of showing at trial that the purpose of including the Technical Specification as part of the contract had the effect that Dean was entitled to withhold payment if the Fortuna Unit was not going to be ready to comply with the Technical Specification by the time stated in the contract. On behalf of the Seller, Mr Bright accepted that everything in the Technical Specification was part of the contract. As to how it fitted in, Mr Bright noted that in the body of the agreement there was only one reference to the Technical Specification. This was in article 2, which described the purchase of the Unit as being “on a “As Is Where Is” basis, with the attached technical specification ABS certification.”

In that regard, submitted Mr Bright, nothing clearly stated when it was that the Unit must be in accord with the Technical Specification nor whether the specified items must work. The Seller’s obligations were limited by the disclaimer of warranties in article 4 and the provisions as to the condition of the Unit in article 5.1. On the question whether there was an obligation to have specified items operational, Mr Bright acknowledged that the court’s construction of the Fortuna Sale Agreement might be shaded by the factual matrix. Accordingly for the purposes of the summary judgment application Mr Bright did not take issue with the proposition that at Closing the Unit had to be in accordance with the Technical Specification. The answer given by the Seller for the purposes of the summary judgment application was that Closing had never happened because the required payments had not been made, and so none of the obligations as regards to Technical Specification ever eventuated.

Similarly, for the purposes of the summary judgment application, Mr Bright was willing to concede that the Unit was not ready by 20 November 2012. Accordingly, and again only for the purposes of the summary judgment application, Mr Bright was willing to concede that if at Closing the Unit was not in accord with the Technical Specification then there would be a breach of the Fortuna Sale Agreement.

It did not follow from this, submitted Mr Bright, that Dean could refuse to make the Intermediary or Closing Payments merely because it considered that the Unit would not be ready at the time of Closing. They were payments which had to be made long before Closing. The commercial position was that the Seller was proceeding with work which cost money. So long as the Seller knew that its position was secured, it was content to proceed with the work, incur costs and finish the job. The written agreement was designed to protect the Seller’s commercial position, for if there were a failure to make the Payments then the Seller would be at risk of doing work for which it received no payment. In this regard Mr Bright referred to the provisions in article 3.4 and 3.5, and stressed in particular what was said in article 7.3: the agreement could be terminated, and the liquidated damages would be payable, “for not receiving the Intermediary Payment or Closing Payment in the Seller’s account caused by whatever reason …”. It did not matter that Dean wanted an inspection to check that the Unit would be ready on time. On any view, submitted Mr Bright, this was not a milestone type of contract. If there was any obligation at all it was only to have everything in accord with the Technical Specification at the end of the contract.

In answer Mr Flenley agreed that article 2 is the only place in the body of the Fortuna Sale Agreement where any reference is made to the Technical Specification. However, the actual effect of the contract, in so far as concerned the Seller’s obligations in relation to the Technical Specification, was far from clear. There was a juxtaposition of the sale of a Unit “with the attached technical specification” and the purchase of a Unit on an “As Is Where Is” basis, when the two were inconsistent. The latter would mean that the condition the Unit was in at the date of the contract, warts and all, regardless whether the warts were visible. Plainly that was not the purpose of the contract: it was a contract for the purpose of a rig which was to be refurbished by the Seller. At this point Mr Flenley made a comment by the way of an aside that the Court might think this contract was ripe for rectification.

Returning to the main thrust of his argument, Mr Flenley stressed that the argument for the purposes of the summary judgment application was proceeding on the premise that the trial court would accept that the Seller was required to comply with the Technical Specification. That inevitably raised the question of what impact that obligation had on the payment schedule, and in particular on the obligation to lodge the Intermediate Payment on the date which would otherwise apply (which I shall refer to as the “due date”). It was arguable that the court at trial, in the light of full evidence as to the factual matrix, might conclude that the obligation to lodge the Intermediate Payment would not be operative if on the due date the Unit was in a state where compliance with the Technical Specification could not be achieved by the Closing Date.

In reply on behalf of the Seller, Mr Bright submitted that there was nothing vague about the deliberate, careful and full language in the written contract. In truth, he submitted, Dean’s case was that the language used in the contract was not intended to be there – which had been acknowledged when Mr Flenley suggested that the court might think the case was one for rectification. There was, however, no claim to rectify and that was the end of the matter.

Mr Bright accepted that the court must allow for what might emerge on disclosure. However if Dean had material which would assist its case then Dean ought to disclose it now. It was, submitted Mr Bright, far-fetched to imagine that disclosure by the Seller would assist Dean at trial. The construction advanced on behalf of Dean was contrary to the words used in the contract and contrary to good commercial sense. Dean’s position was secured by the fact that payment would be into an Escrow account. Moreover, added Mr Bright, Mr McKenzie had not gone so far as to say that, on the dates when the Intermediate and Closing Payments were due, compliance with the Technical Specification was unachievable.

If I considered that I had sufficient information about the factual matrix, then I would have no hesitation in seeking to decide the question of construction which arises in the present case. However this is in my view a case where a full understanding of the factual matrix is of particular importance. There are, as it seems to me, strong grounds for thinking that the written contract suffers from a fundamental internal inconsistency, by using wording in article 2 which has not been thought through. It is conceded by Mr Bright for the purpose of today’s application that, while he stresses the emphatic and broad wording later in the contract, nonetheless that wording must be read down to allow for an obligation to comply with the Technical Specification. Assuming, as I must for the purposes of today, that the court at trial would reach that conclusion, I cannot rule out the possibility that the evidence at trial may be such as to leave the court to conclude that what is to be read in, in order to take account of the factual matrix, must go beyond a mere entitlement to claim damages for breach of the Technical Specification.

Dean’s second answer to the Fortuna liquidated claim would arise if the court were to conclude that the contract should not be interpreted in the way that Dr Alswadeh says he had interpreted it. In that event Dean relies upon an estoppel by convention. For that purpose it will be necessary to show at a trial that the Seller had acquiesced in Dr Alswadeh’s understanding that it could not insist on payments in circumstances where Dean had not been allowed to inspect the vessel and check on progress.

Mr Bright in his oral submissions identified two obstacles which Dean needed to overcome in order to rely upon estoppel by convention. The first was that, as stated in K. Lokumal & Sons (London) Limited v Lotte Shipping Co Pte Limited [1985] 2 Lloyds Rep 28 (The August P Leonhardt): the estoppel

… requires communications to pass across the line between the parties. It is not enough that each of two parties acts on an assumption not communicated to the other.

The second obstacle was that it was not enough merely to show that the Seller acquiesced in an understanding that by the completion of the sale the Seller must ensure that the Unit complied with the Technical Specification. For the purposes of the summary judgment application, Mr Bright was prepared to concede that there was such an estoppel. What Dr Alswadeh had said was that the inspection that began on 22 September 2012 was conducted in order to check on progress. It had not been suggested then that progress was inadequate. Even if the Seller had acquiesced in an assumption that Dean could inspect to check on progress, there was no evidence of any shared understanding that if progress was unsatisfactory payment could be withheld.

On behalf of Dean Mr Flenley in oral submissions noted that there was evidence that Mr Shahriary had co-ordinated the visit which began on 22 September 2012, and that lengthy progress reports were provided. Dr Alswadeh had given evidence of a belief which went beyond a mere obligation to comply with the Technical Specification at the time of Closing. The question whether the Seller acquiesced in Dr Alswadeh’s additional belief was highly fact specific. It had been only at a very late stage that the Seller had denied the right to inspect in mid November 2012. As Dr Alswadeh had observed, if there were no right to inspect so as to check on progress it was difficult to understand why the Seller had permitted inspection and had given progress reports.

In reply Mr Bright submitted that the position as to Dr Alswadeh’s own belief as to what the contract permitted was confused, and that Dr Alswadeh had not dealt with what manifest conduct on the part of Dean was acquiesced by the Seller. What had happened was that time was allowed to pass without paying. The reality, submitted Mr Bright, was that the mid-November request for inspection had been rejected until payment was made. Dr Alswadeh had never said that payment was not made because he was not satisfied as to progress. The contention made in his witness statement in that regard was never articulated at that time. The case on estoppel therefore failed because evidence of the Seller’s state of mind was non existent, evidence of anything “crossing the line” was non existent, and an inspection taking place was consistent with any number of things and did not demonstrate acquiescence in an understanding that Dean could insist on an opportunity to inspect in order to check progress prior to the Intermediary and Closing Payments.

Here, too, it seems to me that much will depend upon the evidence that emerges at trial. Communications between the parties about the inspection will have “crossed the line”. The same will be true of communications conveyed by the parties’ conduct in relation those inspections. I do not consider that I can, at the present stage, rule out the possibility that the evidence at trial may enable Dean to show that Dr Alswadeh did indeed have the understanding as to an entitlement to inspect prior to making the Intermediary and Closing Payments that he describes, and that the Seller acquiesced in that assumption.

I noted in paragraph 122 above an observation by Mr Bright that Mr McKenzie had not gone so far as to say that, on the dates when the Intermediate and Closing Payments were due, compliance with the Technical Specification was unachievable. In that regard, however, Mr McKenzie has said in paragraph 8.3 of his report (see paragraph 90 above) that, based on the information available, it is questionable whether either the GSP Britannia or the GSP Fortuna would have been fully in compliance with their respective Technical Specifications at their respective Closing Dates. This conclusion is supported by the analysis set out earlier in his report. It seems to me that for present purposes it shows that Dean has a realistic prospect of demonstrating at trial that compliance would not have been achievable within the relevant timescale.

Conclusion

For all these reasons I refuse the application.