In Astor Management AG v Atalaya Mining plc(1) the High Court was asked to consider whether Atalaya had breached an obligation to use 'all reasonable endeavours' to secure senior debt financing in relation to the operation of a copper mine in southern Spain.

The decision of Justice Leggatt continues a judicial trend towards granting contractual force to clauses which might have previously failed for uncertainty. In the case of the infamously imprecise 'all reasonable endeavours' clauses that continue to be a fertile source of contractual disputes, the court's job is to give legal effect to what the parties have agreed. In particular, where the parties have adopted a test of 'reasonableness', they are deliberately inviting the court to make a value judgement which limits their freedom of action.


In 2008 the parties entered into a master agreement pursuant to which defendant mining company Atalaya (formerly Emed Mining Public Limited) agreed to purchase Astor's share in a dormant copper mine for €60 million. Under the terms of the master agreement, the consideration was deferred on the basis that Atalaya did not at that stage have the cash to cover the market value of Astor's share of the mine.

Schedule 2 of the master agreement set out the circumstances under which the obligation to pay the deferred consideration would be triggered. This included an obligation on Atalaya to secure senior debt finance and related guarantee facilities for a sum sufficient for the restart of mining operations at the site. This was accompanied by an obligation on Atalaya at Clause 6(f) of the master agreement to "use all reasonable endeavours to obtain the Senior Debt Facility with EMED Tartessus as borrower and to procure the restart of mining activities in the Project on or before 31 December 2009". In the event, Atalaya did not obtain senior debt financing, but instead raised funds through a round of equity financing via its parent company.

Astor's primary case was that the obligation to pay the deferred consideration had been triggered since mining had restarted in 2015. It did not matter that, strictly speaking, Atalaya had raised funds other than by way of senior debt financing; the 'principle of futility' meant that the court would not insist on compliance with a contractual pre-condition that in the event served no useful purpose. The key thing was that mining operations had restarted and it did not matter that this had been achieved without the need for a senior debt facility; thus, this requirement had fallen away.

Astor's secondary case was that if the obligation to repay the deferred consideration had not been triggered, Atalaya was otherwise in breach of the obligation to use all reasonable endeavours to obtain senior financing under Clause 6(f) of the master agreement. Astor pleaded that had all reasonable endeavours been used, the sum of money that had been raised from shareholders could have been obtained in the form of a senior debt facility provided by one or more of the shareholder investors. Astor also ran an argument that Atalaya had breached an implied obligation of good faith in failing to obtain funding in the form of a senior debt facility.

Atalaya argued in reply that the obligation to pay the deferred consideration had not been triggered, and either that the obligation at Clause 6(f) to use all reasonable endeavours was unenforceable or, if it was enforceable, that Atalaya had complied with it. Atalaya also said that there was no implied obligation of good faith in relation to obtaining the senior debt financing or, if there was, that again Atalaya had complied with it.


The court found that the obligation to repay the deferred consideration had not been triggered; there is no principle of futility in English law whereby the courts would not insist on the fulfilment of a pre-condition to the accrual of a contractual right that in the circumstances would be futile or unnecessary. The financing that had been obtained in the form of an intra-group loan from the parent company's issuance of new shares was not senior loan finance and therefore the trigger to pay the first instalment of deferred consideration had not fallen due.

The court then turned its attention to whether Atalaya had failed to use all reasonable endeavours to procure the senior debt finance. It commenced its analysis by dealing with Atalaya's arguments that the clause was unenforceable, applying the principles laid down by Justice Andrews in Dany Lions Ltd v Bristol Cars Ltd.(2) In Dany Lions it was held that an obligation to use all reasonable endeavours is enforceable only if the object of the endeavours is sufficiently certain and there are sufficient objective criteria by which to evaluate the reasonableness of the endeavours.

Atalaya's counsel relied on Andrews' observation that the requirements may be satisfied if the object is a future agreement with a third party, but that such cases are likely to be "exceptional"; Clause 6(f) could not be regarded as falling within the exceptional category of enforceable obligations because there were no objective criteria against which Atalaya's reasonable endeavours could be judged. Determining whether Atalaya had breached its obligation to use all reasonable endeavours required the court to make an unlimited number of minute judgements as to what was in its best interests, which no court would be in a position to do.

The court did not accept the submission that the requirements of certainty of object and sufficiently objective criteria will not normally be satisfied where the object of the endeavours obligation is an agreement with a third party. It observed that the role of the court in a commercial dispute is to give legal effect to what the parties had agreed, and that it could not refuse to adjudicate on an issue of contractual interpretation merely on the basis that the parties had defined their obligations in an imprecise or unclear way.

In reaching this conclusion, the court appealed to a line of authorities which clarified that striking down a clause as void for uncertainty is a last resort (or, as Lord Denning put it in Nea Agrex SA v Baltic Shipping Co Ltd,(3) "a counsel of despair"). In the first instance the court should attempt to do justice between the parties, which the courts had clearly shown a willingness to do in other cases involving similarly confounding clauses. The court in this case cited the example of a case in which the court had found as enforceable an obligation to resolve a dispute by "friendly discussion".(4) It also drew attention to a passage in Dany Lions in which Andrews had recognised that where the object of the endeavours is the entry into an agreement with a third party (as opposed to the agreement itself), there was sufficient certainty as to the object of the endeavours; the court considered that the present case fell into that category. Accordingly, it was not exceptional for a court to seek to give legal effect to an endeavours clause (whether it be 'best endeavours', 'all reasonable endeavours' or any of their variants), and the court was eminently capable of discerning its meaning in the present case and whether it had been complied with.

Turning to the facts, the court considered that while it was clearly in Atalaya's financial interest not to obtain senior debt financing in order to avoid triggering the deferred consideration, this did not absolve it from the obligation to comply with the clause to use reasonable endeavours to secure the form of financing specified under Clause 6(f). However, this did not mean that Atalaya was obliged to obtain senior debt financing at any cost if to do so would compromise the financial viability of the mining project. On the facts, Astor had not shown that Atalaya failed to use all reasonable endeavours to obtain the financing in the form of a senior debt facility. In particular, the court was not persuaded that the shareholders would have agreed to provide senior debt financing had Atalaya directed its endeavours to that end. Thus, Clause 6(f) had not been breached.

The court also found that Atalaya had breached no implied term of good faith in failing to obtain senior debt financing; such a requirement was already subsumed within the express obligation to use all reasonable endeavours. There having been no breach of the endeavours obligation, it followed there was no breach of the requirement to act in good faith.


The decision shows that endeavours clauses can have contractual force. Imprecise though such clauses often are, the court will not avoid discerning their meaning in the factual context, although the scope and extent of the obligation are inevitably highly fact specific. The decision is therefore a reminder that it is always preferable for parties to strive for certainty when defining their respective obligations, rather than risk a situation where each party has a different understanding of the degree of effort required to discharge the obligation. For lawyers drafting such clauses, it pays to reflect on the commercial purpose of the clause and whether it can be formulated in more precise language to achieve that purpose. This will ensure that the agreement gives effect to the parties' intentions, rather than leaving it to the court to make a value judgement should a dispute arise.

For further information on this topic please contact Greg Pooler or Andy McGregor at RPC by telephone (+44 20 3060 6000) or email ( or The RPC website can be accessed at

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(1) [2017] EWHC 425 (Comm).

(2) [2014] EWHC 817.

(3) [1976] 1 QB 933, 943.

(4) Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd [2014] EWHC 2104 (Comm).