This study uses a
doctrinal analysis of case law to examine whether there is hierarchy of
approaches when interpreting commercial contracts in English courts. Using
cases from Prenn v. Simmonds to Wood v. Capita, it shows how the latter has
become the latest authority on commercial contractual construction. The study
finds that Wood v. Capita is a nexus between Rainy Sky and Arnold v. Britton,
two cases that years of jurisprudence found to offer competing approaches to
interpretation. The Court emphasizes that these two cases say the same thing
and that construction is both a unitary and iterative process. This refutes the
hypothesis that a hierarchy of approaches exists.
While the Court’s
attempt at complementarity in Wood v. Capita has brought legitimacy to the
divergent approaches to construction, this had not made the process any more
transparent or objective. This has been compounded by the findings of Sara
& Hossein Asset Holdings Ltd v. Blacks Outdoor Retail Ltd, a case
predicated on Wood v. Capita. This case shows that where there are rival
meanings, the court can reject the alternatives proposed by the parties and
insert its own, as long as the contractual context supports this alternative.
This usage of the Court’s power and the persistent dissent across cases suggest
that cases involving the interpretation of commercial contracts will continue
to be litigated, with the Supreme Court called upon to provide greater clarity
on what we mean by construction and how it should take place.