CL-2024-000678 - [2025] EWHC 2531 (Comm)

The terms “Internal Transfer Price” and “Dealer Net Price”, and their abbreviations, are not used or acknowledged anywhere in the Distribution Agreement. They are not terms of art in the industry. They appear simply to be in-house jargon within the Aston Martin group, with which AMMENA has no doubt become familiar over time because of its business relationship with the Aston Martin group.

It is not clear to me whether AMMENA was familiar with these terms at the time the Distribution Agreement was concluded. Nor is it clear whether AMMENA was aware of any of AML’s arrangements in territories other than the Middle East and North Africa. I was told in the course of Mr Chapman KC’s submissions (on behalf of AMMENA) that the evidence to the Tribunal was that, in April 2018, AMMENA knew that AML had no other independent distributor. I was told in the course of Mr Quirk KC’s submissions (on behalf of AML) that the evidence to the Tribunal was that AMMENA did not know of the existence of captive distributors in North America and China. Neither Mr Chapman KC nor Mr Quirk KC suggested that what the other had said was wrong or misleading, nor did either of them even assert that the evidence that the other referred to had been challenged. Nevertheless, the fact is that the Award does not refer to this evidence, still less does it record any of these matters as a finding of fact.

Even though what Mr Chapman KC and Mr Quirk KC said in this regard seems likely to have been correct, it would not be right for me to add materially to the factual findings that can be gleaned from the Award. I therefore am not prepared to proceed on the basis that it is positively established that AMMENA knew in April 2018 that there was no other independent distributor, or that AMMENA did not know of the existence of captive distributors in North America and China; still less that it is established either way that AMMENA was or was not familiar with the terms “Internal Transfer Price”/“ITP” and “Dealer Net Price”/“DNP”, as used by AML.

However, the fact that these submissions were made to me highlights the stark reality that a Court which has to determine an issue of contractual interpretation on the basis of very limited materials (typically, the Award and the contract) is simply not in the same position as a Tribunal which conducted a multi-day evidentiary hearing.

In saying this, I have in mind that the familiar authorities on contractual interpretation emphasise that the process involves considering all the matters enumerated by Lord Neuberger as relevant to identifying what the parties meant, in Arnold v Britton at [15]:

“That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions.”

I also have in mind Lord Hodge’s observation in Wood v Capita Insurance Services Ltd, at [12]:

“This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: the Arnold case, para 77 citing In re Sigma Finance Corpn [2010] 1 All ER 571, para 12, per Lord Mance JSC.”

As to Lord Neuberger’s factor (i), I do not shrink from regarding my view of the natural and ordinary meaning of words as just as valid as anyone else’s (although I am conscious that I should resist the instinct to regard my view as more valid than anyone else’s). Equally, I am just as qualified as the Tribunal to consider (ii) the other relevant provisions of the Distribution Agreement; and (probably) (iii) the overall purpose and (v) commercial common sense. However, I simply do not know as much about (iv) the factual matrix as the Tribunal did. This means that I cannot conduct the necessary iterative process in the same way that the Tribunal will have done.

How the Court approaches problems of this kind will vary, but in some cases it may be right for the Court to be slow to be persuaded to overturn the Tribunal’s conclusion. In practical terms, it may be necessary to consider how significant the factual matrix was to the Tribunal’s decision; at least, if the Court’s interpretation of the relevant provision would otherwise be different from the Tribunal’s interpretation.

There are authorities which suggest that contractual interpretation is, always and only, a question of law. This is often said to be the effect of the judgment of Mustill J (as he then was) in Vinava Shipping Co. Ltd. v Finelvet AG (The “Chrysalis”) [1983] 1 WLR 1469, at p. 1475B. That is a conveniently simple approach, when it comes to differentiating between questions which can and cannot be regarded as questions of law for the purposes of Section 69 of the Arbitration Act 1996. However, the modern approach to contractual interpretation in the light of authorities such as Arnold v Britton and Wood v Capita Insurance Services Ltd, which requires attention to some avowedly factual matters in the context of an iterative process, makes it difficult to avoid the conclusion that it is really a mixed question of law and fact. The nature and character of that mixture will vary from case to case.