E J R Lovelock Ltd v Exportles [1968] 1 Lloyd’s Rep 163
Contract – Vagueness – Uncertainty – Meaningless Phrases – Arbitration Clause
Facts
E J R Lovelock Ltd, the buyers, agreed to purchase a quantity of timber from the sellers, Exportles, who were a joint stock company dealing in lumber based in Moscow, Russia. The wood was to be bought and exported by Exportles, who were the sole exporter of timber out of Russia at this time. The agreement contained a dispute resolution clause which referred “any dispute” to arbitration in London and “any other dispute” to arbitration in Moscow, without identifying which disputes belonged in each venue.
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Issues
Which, if any, of the apparently conflicting arbitration clauses were to be considered correct. Whether or not the agreement was too vague or uncertain to be enforceable. Whether or not the court could simply disregard the ambiguous clause whilst preserving the rest of the agreement.
Decision/Outcome
The agreement was not void for uncertainty. The dispute resolution clause itself was so vague and ambiguous as to be capable of being considered deprived of meaning. Because it was a meaningless phrase, it would be disregarded by the court. There was therefore no effective arbitration clause at all. The action could therefore proceed in court. This was possible because the central terms of the agreement themselves were still clear and determinable by the court. The dispute resolution clause was capable of being disregarded without destroying the central obligations of the parties. As such, the court was capable of, and should ensure that the contract be given effect and upheld as far as possible.
