Dwr Cymru Cyfyngedig (Welsh Water) v Corus UK Ltd

Dwr Cymru Cyfyngedig (Welsh Water) v Corus UK Ltd

Clause 17 of the Llanwern 1993 Agreement was intended to have contractual effect, entitling Corus to continued supply on terms to be agreed or determined by the Director under section 56 of the Water Industry Act 1991. Since the relevant request for supply predated the introduction of a charges scheme, the Authority retained power to determine charges. The introduction of a charges scheme by Welsh Water could not override the agreed contractual machinery without breaching the Agreement.

Parties
Claimant/respondent: Dŵr Cymru Cyfyngedig (Welsh Water); Defendant/appellant: Corus UK Limited
Jurisdiction
England and Wales
Judgment Date
30 March 2007
Procedural Posture
Civil Appeal / Appeal From Summary Judgment in the High Court
Outcome
Appeal allowed
Legal Topics
Construction of Contract Clauses, Effect of Statutory Schemes on Contracts, Water Supply Agreements, Enforceability of Agreements to Agree
Contract Law Statutory Interpretation Commercial Law Construction of Contract Clauses Effect of Statutory Schemes on Contracts Water Supply Agreements Enforceability of Agreements to Agree

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Parties

Dŵr Cymru Cyfyngedig (Welsh Water)

Claimant/respondent

Corus UK Limited

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From Summary Judgment in the High Court

Legal Issues

  1. 1 Whether clause 17 of the Llanwern 1993 Agreement had contractual effect after expiry of the fixed term
  2. 2 Whether the statutory charging scheme under the Water Industry Act 1991 superseded the contractual mechanism for determining charges
  3. 3 Whether the failure of the contractual machinery for determining terms rendered the agreement unenforceable

Ratio Decidendi

Clause 17 of the Llanwern 1993 Agreement was intended to have contractual effect, entitling Corus to continued supply on terms to be agreed or determined by the Director under section 56 of the Water Industry Act 1991. Since the relevant request for supply predated the introduction of a charges scheme, the Authority retained power to determine charges. The introduction of a charges scheme by Welsh Water could not override the agreed contractual machinery without breaching the Agreement.

Court Disposition

Appeal allowed

Orders

  • Summary judgment set aside
  • Matter remitted for further determination consistent with the judgment