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In a geopolitically significant case, the English High Court opined on important provisions of the EU sanctions regime.

By Charles Claypoole, Robert Price, and Olivia Featherstone

The judgment of the English High Court in Ministry of Defence & Support for Armed Forces of the Islamic Republic of Iran v. International Military Services Limited [2019] EWHC 1994 (Comm) constitutes the latest decision in a long-running dispute between the Iranian Ministry of Defence, (MODSAF), and the UK Ministry of Defence (via its subsidiary, International Military Services (IMS) that has been litigated in various courts and tribunals since 1990.

This latest judgment concerns whether IMS is liable to pay interest on the amounts an arbitral tribunal awarded to MODSAF in 2001, or whether IMS is prohibited from paying such interest by EU sanctions laws (specifically, EU Regulation 267/2012 – as amended).

The judgment carries great legal importance, as judicial pronouncements on the interpretation, application, and operation of EU sanctions laws are relatively rare.

Objective test applies if a prior concluded contract exists, but subjective test applies if there is a continuing common intention.

By George Schurr and Alex Cox

In the recent case of FSHC Group Holdings Limited v. GLAS Trust Corporation Ltd [2019] EWCA Civ 1361, the English Court of Appeal held that for rectification to be granted on the basis of common mistake, a claimant must establish that either:

  1. the disputed document does not give effect to a prior concluded contract (objectively determined); or
  2. at the time the disputed document was executed, there existed a common intention between the parties in relation to a particular matter (subjectively determined) which, by mistake, was not recorded in the final document as executed.

Rectification is a discretionary remedy that is available to the court in circumstances in which a written contract does not reflect the terms as agreed between the parties, i.e., “where there has been a mistake, not in the making, but in the recording, of a contract”[i].