Passenger Track Access Contract


This Page was last updated on 17 March 2016


Part 4.   Standard of Performance


4.2   Good faith


Rule, clause or Condition


Date of Hearing

Points made within Determination  (Verbatim extracts given in Italics, or between quotes)

4.2  Good faith


Jan 2016

5.7.2. The obligation to act in good faith requires the parties to (inter alia) “observe reasonable commercial standards of fair dealing”.  This is established by the cases cited by [the TOC].  These were Berkeley Community Villages Ltd and Anor v F Pullen and Anor [2007] 1330 Ch, (of which I found paragraphs 86-98 particularly helpful) and CPC Group Ltd v Qatari Real Estate Investment Company[2010] EWHC 1535 (see the analysis at paragraph 237 – 248).


5.7.3  The obligation to observe reasonable commercial standards of fair dealing should mean that agreements are adhered to, especially when they are legally binding.  ….


5.7.4  However, that is not what happened in this case.  Here the Parties entered into an agreement that was confirmed in writing …...  Subsequently, however, NR has sought to go back on and deny the validity of the agreement on grounds …. that have failed and which could and should have been mentioned before the agreement was entered into ….


5.7.7  NR voluntarily entered into the agreement, which I have concluded is enforceable - because NR’s points of defence fail.  …..  This seems to me to be a breach of reasonable commercial standards; there is a breach of “reasonable commercial fair dealing”.  Therefore NR is in breach of the obligation of good faith …

ADA27, paras. 5.7.2 - 5.7.7