Case Nos: CL-2023-000206 and CL-2023-000207 - [2025] EWHC 1591 (Comm)

The Defendants pleaded in the alternative that the parties’ conduct, taken with the relevant discussions and correspondence, had given rise to either a promissory estoppel or an estoppel by convention. Again, there was no dispute as to what it would be necessary to establish for there to be either of these two forms of estoppel.

Thus, as set out in Chitty [7-031], the five elements which must be present to establish a defence of promissory estoppel are as follows:

A legal relationship giving rise to rights and duties between the parties;

A promise or representation by one party that they will not enforce against the other their strict legal rights arising out of that relationship;

An intention on the part of the former party that the latter will rely on the representation;

Reliance on the representation by the representee;

It must be inequitable for the former party to go back on their promise.

At [7-040] Chitty states:

An estoppel by convention arises where the parties share an assumption as to facts or law, which one of the parties had relied on, and which it would be unjust for the other party to go back on. In Tinkler v HMRC [2021] UKSC 39 (at [42] – [53]), Lord Burrows JSC approved Briggs J’s statement of principles in Revenue and Customs Comrs v Benchdollar [2009] EWHC 1310 (Ch) (as itself approved with one amendment in Stena Line Ltd v Merchant Navy Ratings Pension Fund Trustees Ltd [2010] EWHC 1805 (Ch) and Blindley Heath Investments Ltd v Bass [2015] EWCA Civ 1023). From those casesthe five elements of an estoppel by convention may be summarised as follows:

There must be a common assumption of fact or law between the parties, whether because they both expressed that assumption, or because one party expressed it and the other party said or did something which crossed the line sufficient to manifest an assent to the assumption.

The party alleged to be estopped (‘D’) conveyed to the other (‘C’) that he expected that other to rely on the common assumption, such that D may be said to have assumed some element of responsibility for the C’s reliance;

C in fact relied upon the common assumption to a sufficient extent, rather than merely upon his own independent view of the matter;

C’s reliance occurred in connexion with some subsequent mutual dealing between C and D;

C must have suffered some detriment, or D received some benefit, in such a way as to make it unconscionable for D to assert the true legal or factual position.