Jurisdiction(s):
United Kingdom

English High Court rectifies novation agreement for shared mistake, highlighting admissibility distinction between construction and rectification—SATA Internacional v Hi Fly [2024] EWHC 2762 (Comm)

Published on: 06 November 2024

Published by a LexisNexis Dispute Resolution expert

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SATA Internacional-Azores Airline SA v Hi Fly Ltd [2024] EWHC 2762 (Comm) What are the practical implications of this case?

This decision examines the requirement for rectification (here, of a novation agreement) and highlights the distinct approach to admissible material in construction cases as compared with rectification claims. It shows the court first construing the written terms by applying an objective test, and then, by reference to a broader evidential record and a subjective test, deciding whether the contract recorded the parties’ common assumption at the time of contracting, such that rectification might be ordered. The judge also emphasised the difficulties of litigating events long after they occurred, noting that, alongside the oft-cited observations of Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd, contemporaneous documents are crucial to the rigorous assessment of oral testimony. Yet it is also necessary to examine the exchange of documents, and negotiations upon them, within the wider context of the circumstances then prevailing, and to evaluate those materials against that factual matrix, so that the documentary trail is read in context and witness memory is tested against the surrounding circumstances then obtaining and the overall transactional setting, in this case, that the...

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