The High Court held in (1) Rosserlane Consultants Ltd (2) Swinbrook Developments Limited v Credit Suisse International(2015) that there was no implied term requiring the Defendant to use reasonable care to obtain the best price it could when asserting its right of forced sale under a participation agreement. The agreement was freely negotiated by experienced commercial lawyers and while the Claimants were under an express obligation to obtain the best price they could when procuring a sale, the Defendant was not under any express obligation to do so and no term was to be implied to impose such a duty.


In December 2003, Caspian Energy Group LP ("CEG") acceded to a joint venture agreement with the State Oil Company of Azerbaijan Republic.  The agreement gave CEG a 51 per cent. stake in the Shirvan Oil Company ("Shirvan"), which operated a well-established oilfield in Azerbaijan.

One of the terms of the joint venture agreement required CEG to contribute a certain level of funding to Shirvan, to enable it to continue to develop the oilfield.  The Claimants, being respectively the general partner and limited partner of CEG, were ultimately responsible for this.  By December 2006, CEG was struggling to meet its existing payment obligations, and it therefore entered into a loan agreement with the Defendant.  The purpose of the loan was to re-finance its existing debts and enable CEG to realise its stake in Shirvan.  As part of the agreement, the Claimants granted security over their interests in CEG in favour of the Defendant.  This included entry into a participation agreement (the "Participation Agreement"), which, amongst other things, granted the Defendant the right to step in and sell CEG on behalf of the Claimants if they had not sold it by a set date.  This right was subsequently exercised and the Defendant sold CEG in February 2008.


The key issue to be determined was whether the Participation Agreement contained an implied term to the effect that the Defendant, once it asserted its right of forced sale, was under a duty to use reasonable care to obtain the best price it reasonably could for CEG. The Claimants put forward three alternative arguments:

  • by taking on the responsibility of selling CEG, the Defendant was acting as the Claimants' agent and so owed a duty to take reasonable care as to the best price it could achieve;
  • a party given the power to sell another's property is subject to an implied duty to take reasonable care as to the best price it can obtain (the situation being analogous to that of a mortgagee selling property subject to a mortgage); and
  • a duty should be implied as a result of the particular circumstances and relationship of the parties, as provided inAttorney General of Belize v Belize Telecom Ltd (2009).


Peter Smith J rejected the Claimants' arguments as follows:

  • He did not agree that the Defendant was acting as agent for the Claimants.  He considered that the Defendant had been given the right of forced sale in the name of the Claimants in order to protect the Defendant's own interests under the loan agreement.  This was not a general appointment and the rights and obligations assumed were only those that were expressly set out in the Participation Agreement.
  • He was not persuaded that the duty owed by a mortgagee of a property should be applied on a more general basis.  The Participation Agreement was freely negotiated by experienced commercial lawyers, and had been drafted in such a way as to give the Defendant a method of control without such control taking the form of a mortgage.
  • He considered that the judgment in Belize was not applicable to the facts of this case.  Instead, the "traditional" rules of contractual construction should apply.  Given that the Participation Agreement was freely negotiated and drafted by experienced commercial lawyers and had been amended specifically to impose an obligation on the Claimants to obtain the best price possible for CEG (without putting any express obligation on the Defendant to do the same), it was clear that no such term should be implied.


This case reaffirms that a court will not readily imply a term into a contract where the parties have not addressed a particular issue, regardless of the outcome that this produces.  This is important for significant commercial contracts given the sometimes conflicting case law in this area, and will be welcomed by those who value the commercial certainty that contracts governed by English law provide.