Oceanbulk Shipping v TMT Asia [2010] UKSC 44

This case, decided recently in the Supreme Court, makes useful reading for Contract Law students.

The court can consider the objective facts of the parties pre-contractual negotiations when trying to work out the true intentions of the parties - nd now, it appears, even those negotiations entered into on a “without prejudice” basis.

Following the ruling, it appears that “without prejudice” negotiations - traditionally intended to allow the parties to negotiate freely -  may now be admissible if it helps the judge work out the intentions of the parties in order to rule on exactly how the contract should be constructed.

A good opportunity for your students to analyse a new decision - do they think it’s a good idea to create an exception to the without prejudice rule? Is this fair, or not? What’s the impact on certainty?

For AS students, Oceanbulk is also a case where the Court took into account the (persuasive) decision of a lower Court - namely the Court of Appeal in Unilever v Proctor & Gamble [2000] 1 WLR 2436.

If this case seems dry, your students might want to consider the damages at stake - between three and four hundred million dollars…

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