High Court gives guidance on availability of summary judgment and frustration in contractual disputes

A recent High Court decision is a good example of the court’s willingness to deal with questions of contractual interpretation on a summary basis in an appropriate case, without the need for a full trial. However, it also highlights the difficulties that will be faced in successfully striking out a defence based on the common law doctrine of frustration, which is likely to be of particular interest in the context of the COVID-19 pandemic: Natixis & Anor v Famfa Oil Ltd [2020] 2 WLUK 330.

The following factors (in particular) were highlighted as making the present case suitable for determination by summary judgment: the claim involved a short point of contractual construction; the factual matrix was not in dispute; the agreements were sophisticated, complex and drafted by skilled professionals; and it was appropriate to interpret the contracts principally by a textual analysis.

However, the court was not prepared to summarily strike out a defence based on the doctrine of frustration. Having regard to the need to take a multi-factorial approach to this question, the court held that the relevant factors (including the parties’ knowledge and expectations at the time of entering into the contract, in particular as to risk) could only properly be investigated at trial following disclosure and the exploration of oral evidence in cross-examination.

For more information see this post on our Banking Litigation Notes blog.