Writing in NLJ this week, Masood Ahmed, University of Leicester, and Alperen Dogan, independent legal researcher, examine Ropa v Kharis Solutions Ltd, where the Commercial Court was asked to interpret an unclear escalation clause. Although the wording suggested disputes 'may' proceed to mediation before arbitration, the court held arbitration was intended to be mandatory, rejecting an interpretation it described as 'commercially curious and practically unworkable'.
It also ruled that mediation was not an enforceable condition precedent because the clause lacked sufficient certainty.
The authors say the decision reinforces the courts' preference for construing contracts in line with the parties' objective commercial intentions rather than a literal reading that produces unrealistic results. Their conclusion is simple: vague drafting invites costly procedural battles that careful contract drafting could have avoided.
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