Centennial Coal Company Ltd v Xstrata Coal Pty Ltd [2009] NSWCA 341

Centennial Coal Company Ltd v Xstrata Coal Pty Ltd [2009] NSWCA 341

The obligation in clause 8.6(b) to use all reasonable endeavours to procure novation and transfer of NCIG Arrangements was an ongoing one, subsisting until completion of transfer/novation or exclusion of the arrangements under clause 8.6(e); invoking the Schedule 7 pre-emption process was not a reasonable endeavour because it would likely defeat the contractual object; clause 8.6(c) had indeterminate operation; appellants were not discharged from obligations.

Parties
First Appellant: Centennial Coal Company Limited; Second Appellant: Centennial Hunter Pty Limited; First Respondent: Xstrata Coal Pty Limited; Second Respondent: Xstrata Mangoola Pty Limited
Jurisdiction
Australia
Judgment Date
16 October 2009
Procedural Posture
Appeal / Judgment
Outcome
Appeal dismissed with costs.
Legal Topics
Construction of Contracts, Reasonable Endeavours Clauses, Asset Sale Agreements, Pre Emption Rights, Novation, Sale of Coal Mining Project
Contracts Commercial Law Construction of Contracts Reasonable Endeavours Clauses Asset Sale Agreements Pre Emption Rights Novation Sale of Coal Mining Project

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Parties

Centennial Coal Company Limited

First Appellant

Centennial Hunter Pty Limited

Second Appellant

Xstrata Coal Pty Limited

First Respondent

Xstrata Mangoola Pty Limited

Second Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether 'reasonable endeavours' under Asset Sale Deed clause 8.6 required invocation of pre-emption provisions for transfer of NCIG Arrangements
  2. 2 Whether obligations under clause 8.6(c) are temporally limited or of indeterminate duration
  3. 3 Whether respondents breached interdependent obligations under clause 8.6(b) and thereby discharged appellants from further performance

Ratio Decidendi

The obligation in clause 8.6(b) to use all reasonable endeavours to procure novation and transfer of NCIG Arrangements was an ongoing one, subsisting until completion of transfer/novation or exclusion of the arrangements under clause 8.6(e); invoking the Schedule 7 pre-emption process was not a reasonable endeavour because it would likely defeat the contractual object; clause 8.6(c) had indeterminate operation; appellants were not discharged from obligations.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.