HT-2023-000321 - [2025] EWHC 1764 (TCC)

Irrespective of the question of liquidated damages, Mr Macey-Dare KC argues that the parties expressly agreed that Pharos would deliver the TROV and associated equipment at Esbjerg on 9 June 2022 such that a failure to achieve this placed Pharos in breach of contract. As set out above, KML accepts that 9 June 2022 was not specified anywhere in the Purchase Order(s). Mr Macey-Dare also made clear that the agreement in respect of the delivery date did not operate by way of any variation to the Contract (perhaps on the basis that such an argument would fall foul of the no oral variation provision at Clause 3.1).

It is said, however, that the agreement of the date constituted the operation by the parties of the contractual mechanism for fixing the delivery date, which they must be taken to have agreed in the contract. Mr Macey-Dare KC accepts that this alleged contractual mechanism was also not explicit. Instead, it is argued that the parties ‘must have contemplated’ that they would agree a delivery date, once KML’s schedule for the works and the available weather windows became clearer.

Although not articulated as such, Mr Macey-Dare KC is effectively arguing that there is an implied contractual mechanism for fixing the delivery date, pursuant to which the date was agreed and became binding.

However, such an argument does not meet the test for the implication of terms. Whilst it may be obvious as a matter of practicality that the parties would want to liaise about co-ordinating the delivery and mobilisation dates, it is neither obvious nor necessary (in circumstances where the parties did not in fact include anything of the sort in their written agreement) that the results of such co-ordination were intended to become contractually binding obligations. It is trite that the process of implying a term must not become the re-writing of the contract, and that as such the term must be formulated with precision. Yet no part of the asserted implied ‘contractual mechanism for fixing the delivery date’ is expressed with precision. What is the implied mechanism? Would the agreement of the date need to be in writing? In a particular document? Would unilateral insertion of a date into a tracker be sufficient to fulfil the ‘contractual mechanism’ and bind the other party? What was the nature of the unexpressed obligation to meet the mobilisation date? It is neither obvious nor necessary that, had the parties put their minds to it explicitly, they would have agreed an absolute obligation, in circumstances where Pharos would be reliant upon third parties and matters generally outside its direct control (e.g. the customs process). Might the obligation agreed have been one of reasonable endeavours? Or some other expression of obligation, short of an absolute one? There would be a range of different ways of expressing the obligation, each with its own commercial common sense depending on the viewpoint, and it would be not right for the Court to select one and impose it as being the ‘obvious’ or ‘necessary’ one.

Mr Macey-Dare KC expressed the view that, if left to the ‘statutory’ implied term about time for performance, it was unsatisfactory because the obligation to mobilise ‘within a reasonable time’ might permit Pharos to deliver the UTV-670 ready for mobilisation at a time which, although ‘reasonable’ was inconvenient for KML in terms of the mobilisation of its own vessel, which itself might not be ready for the UTV-670 and give rise to standing charges. This may be so, and it is for reasons such as this no doubt that the parties did in fact co-operate over the mobilisation date. But it is not an observation which itself assists in the identification of a single, obvious and/or necessary, articulation of how the parties would have come to express the contractual machinery for fixing the delivery date and the parties’ obligations arising therefrom for the purposes of implying a term. It is just not possible to conclude what the parties ‘must have contemplated’ in this respect.

In circumstances where the date of 9 June 2022 was not agreed pursuant to an implied contractual machinery (as alleged), or itself as a variation to the Contract (not alleged), the only obligation upon Pharos was to carry out the overall works, of which deliver of the UTV-670 was a part, within a reasonable time. It had to carry out its obligation to export the UTV-670 with reasonable skill and care. This is a different obligation to one to ensure that the UTV-670 was delivered within a reasonable time. However, in case I am wrong about this, I consider not only whether Pharos breached its obligation, but also KML’s alternative case that there was a discrete temporal obligation to deliver the UTV-670 within a reasonable time, in the following section.