Astor Management AG & Anr. v Atalaya Mining Plc & Ors. 1/11/18 (CA)

Following the Defendants’ acquisition of the Claimants’ interests in a copper mine, there was provision for payment of deferred consideration contingent on the recommencement of mining and the securing of a “Senior Debt Facility” in a sum sufficient to permit that. The Defendants were unable to secure funding and so obtained the means to do so by way of intra-group loans. The Claimants contended that the deferred consideration was due because the arrangement of finance through other means meant the second pre-condition did not apply and should be ignored by reason of the principle of futility. The Court of Appeal held that in this context the principle was really a question of construction and there was no principle of law or even interpretative presumption which enable a contractual precondition to the accrual of a right or obligation to be disapplied just because complying with it was considered by the court to serve no useful purpose. However if an event occurred which was plainly not intended or contemplated by the parties, judging from the language from the contract, and if it was clear what the parties would have intended, the court would give effect to that intention. However in this instance the lower court judge had been entitled to conclude that it was in the contemplation of the parties that mining could have restarted without raising senior debt finance.