The Supreme Court has decided in King Crude Carriers SA & Others v Ridgebury November LLC & Others [2025] UKSC 39 that there is no principle of deemed fulfilment of conditions precedent in English law. The decision provides a definitive answer to the much-discussed question of the status in England of Mackay v Dick (1881) 6 App Cas 251, in which the House of Lords recognised the existence of a principle of deemed fulfilment in Scottish law.
In King Crude, shipsale contracts on the Norwegian Saleform 2012 provided for payment of deposits into an escrow account which was to be opened by a deposit holder. The buyers agreed to pay the deposits within 3 days after the account was opened. They also agreed to provide the deposit holder with “know your client” documents which were needed to open the account. In breach of contract, the buyers failed to provide the documents. The escrow account was never opened, and the buyers did not pay the deposits.
The sellers claimed the deposits in debt. Their case was that the conditions precedent to the payment of the deposits were deemed to be fulfilled under the Mackay principle in circumstances where the buyers’ breach had prevented the opening of the account. The buyers’ case was that their only liability was in compensatory damages for breach of contract.
LMAA arbitrators found in favour of the sellers. Dias J ([2024] 2 Lloyd’s Rep 115) allowed the buyers’ appeal under Section 69 of the Arbitration Act 1996, holding that, whatever the position in Scotland, there was no principle of deemed fulfilment in English law. Her decision was overturned by the Court of Appeal ([2025] 2 Lloyd’s Rep 140), but restored by the Supreme Court, which unanimously held that the Mackay principle is not part of English law. The Supreme Court also held that the sellers could not recover the deposits on the basis of an implied term or on the true construction of the contracts.
The judgment is available here.
Nigel Eaton KC (Essex Court Chambers) and Dave Barnard (7 King’s Bench Walk) appeared for the buyers, instructed by Charles Weller of Reed Smith.
