The Court of Appeal has dismissed an appeal by Scottish Power from a decision of the Commercial Court which turned on the proper interpretation of a complex, high value energy supply contract. Although the court differed from the judge at first instance on one point relating to particular wording, in general it agreed with the judge’s interpretation and his conclusion. However, its ruling on a more general point provides a helpful reminder that is worth noting.

Scottish Power contended that the judge had lost sight of the fact that there is a presumption that the parties do not intend to give up rights or claims which the general law gives them (Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689). Clear words are required to exclude or limit that right. Since the judge had held that there were two possible meanings, he should have adopted the meaning which did not involve Scottish Power losing what might be very valuable rights.

The Court of Appeal did not agree. The fact that there are two possible meanings was the beginning of the inquiry, not its end. It is then necessary for the court to apply “all its tools of linguistic, contextual, purposive and common sense analysis to discern what the clause really means” (Briggs LJ in Nobahar-Cookson v The Hut Group Ltd [2016] EWCA Civ 128, at paragraph 19). If, as a result of so doing, the answer becomes clear, the court should give effect to it even though the interpretation may deprive a party of a right at law which he might otherwise have had. The judge had correctly adopted this approach. (Scottish Power UK Plc v BP Exploration Operating Company Ltd [2016] EWCA 1043)