Is a contractual obligation to use “reasonable endeavours to agree a binding process for an expert determination” enforceable? In Mireille Raymond Salem & Anor v Faraj (“Freddy”) Moussa Salem & Ors [2024] EWHC 3311 (Ch), the High Court answered in the negative. The decision serves as a principled reaffirmation of the rule in Walford v Miles: that the law cannot compel parties to negotiate in good faith, nor can it supply a mechanism for agreement where none exists.
This case concerns a family dispute over a “Settlement Deed” intended to resolve litigation concerning a shared family business interests in Africa. The central conflict was in respect of a specific clause requiring parties to use “reasonable endeavours to agree a binding process for an expert determination”. Mr Justice Adam Johnson held the clause unenforceable.
The Claimant relied on Astor Management v Atalaya Mining [2017] EWHC 425 (Comm) to argue that “reasonable endeavours” clauses are sufficiently certain to be binding. In Astor, the obligation was to use reasonable endeavours to obtain a loan from a third-party bank. In Astor, the Court held that such a clause was enforceable because the object was clear, and the criteria for success were objective: a court could determine whether a reasonable commercial actor would have approached more banks or accepted specific interest rates etc.
Johnson J rightly distinguished Astor. The critical distinction lies in the target of the endeavours. In Astor, the target was an external result (securing a loan from a third party), measurable against market standards. In Salem, the target was the inter-party consent. The Court returned to the orthodox principle of Walford v Miles: an obligation to negotiate is inherently repugnant to the adversarial position of the parties. A party is entitled to act solely in its own commercial interest and to reject any proposal that does not suit its subjective preferences.
Consequently, an obligation to use “reasonable endeavours to agree” is legally illusory. There are no objective criteria by which a court can adjudicate whether a party’s refusal to agree to a specific process was “reasonable” or “unreasonable”. To hold otherwise would require the court to impose its own view of what the parties ought to have agreed, effectively drafting the contract for them; thereby safeguarding the principle of party autonomy.
