ZAHID AGAINST DUTHUS GROUP INVESTMENTS LIMITED AND HIS ROYAL HIGHNESS PRINCE TURKI BIN MUGRIN AL SAUD [2018] ScotCS CSOH_59 (05 June 2018)

ZAHID AGAINST DUTHUS GROUP INVESTMENTS LIMITED AND HIS ROYAL HIGHNESS PRINCE TURKI BIN MUGRIN AL SAUD [2018] ScotCS CSOH_59 (05 June 2018)

The indemnity clause in Section 1(d) of the Letter of Intent is to be construed as indemnifying the pursuer only for costs and expenses reasonably incurred in relation to the recovery of the deposits. This limitation is to be implied as necessary for business efficacy and is so obvious as to go without saying. The express terms do not support an unqualified indemnity for all costs, and implication of reasonableness is required for commercial and practical coherence.

Citation
[2018] ScotCS CSOH_59
Parties
Pursuer: Mr Khaled Hassan Ibrahim Zahid; Defender: Duthus Group Investments Limited; Third Party: His Royal Highness Prince Turki Bin Mugrin Al Saud
Jurisdiction
Scotland
Judgment Date
05 June 2018
Procedural Posture
Commercial Action (contractual Indemnity) / Judgment After Proof Before Answer, on Construction of Indemnity Clause
Outcome
Case put out by order for further procedure and to give effect to the court’s decision on the construction of the indemnity clause.
Legal Topics
Contractual Indemnity, Interpretation of Contracts, Implied Terms, Legal Costs
Contract Law Commercial Law Contractual Indemnity Interpretation of Contracts Implied Terms Legal Costs

Case Brief

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Parties

Mr Khaled Hassan Ibrahim Zahid

Pursuer

Duthus Group Investments Limited

Defender

His Royal Highness Prince Turki Bin Mugrin Al Saud

Third Party

Procedural Posture

Commercial Action (contractual Indemnity) / Judgment After Proof Before Answer, on Construction of Indemnity Clause

Legal Issues

  1. 1 Proper construction of contractual indemnity clause in Letter of Intent
  2. 2 Whether indemnity covers all costs or only those reasonably incurred

Ratio Decidendi

The indemnity clause in Section 1(d) of the Letter of Intent is to be construed as indemnifying the pursuer only for costs and expenses reasonably incurred in relation to the recovery of the deposits. This limitation is to be implied as necessary for business efficacy and is so obvious as to go without saying. The express terms do not support an unqualified indemnity for all costs, and implication of reasonableness is required for commercial and practical coherence.

Court Disposition

Case put out by order for further procedure and to give effect to the court’s decision on the construction of the indemnity clause.

Orders

  • Case to be put out by order to discuss appropriate interlocutor and further procedure.