While there will always be a question of evidence as to whether a party negotiated “in good faith” or “friendly” (or conducted the negotiations), the decision of Emirates v. Prime Mineral shows an abandonment of the traditional position of the courts to determine that “negotiation agreements” are not applicable, to a more enlightened position that gives effect to the intentions of the parties on the basis of the fundamental principles of the law. 137 See Cartwright and Hesselink, pre-contract liability under European private law, 455-67; Markesinis, S.B., Unberath, H., and Johnston, A., The German Law of Contract – A Comparative Treatise (Oxford 2006), 387Google Scholar. See also Berger, “Harmonization of European Contract Law,” 877; Collins, H., Good Faith in European Contract Law (1994) 14 O.J.L.S. 229Google Scholar. For a somewhat controversial U.S. decision in 2011, whereby a late agreement was obtained in good faith, pursuant to an expressly non-binding schedule, which resulted in damages for violation, as expected, see SIGA Technologies Inc. /PharmAthene Inc. (S. Ct., Delaware, CA No. 2627, March 24, 2013). An agreement under Section 29 of the Indian Contract Act, 1872, is not valid if its conditions are vague and ambiguous, and therefore cannot be clarified. For example, X agrees to exchange a ton of oil.
This agreement is not applicable because it is ambiguous because it is not possible to determine the expected classification. “agreements to be concluded,” a commercial fact for companies, particularly companies participating in long-term contracts such as research and development agreements in the fields of life sciences or industry, complex technology contracts or energy and resource supply agreements. Often, companies will reach an agreement on the basis of an agreement (explicit or implied) that another agreement will be reached at a later date if the economic reasons and likely conditions of that subsequent agreement have become clearer. Therefore, instead of negotiating the secondary agreement provided for on the date of the initial contract, the parties simply agree that all or all of the terms of the contract will be set in the future. 96 See Peel, “The Status of Agreements,” p. 40 (the distinction between Lord Ackner at Walford between an enforceable duty to apply “best efforts” and an unenforceable duty of negotiation calls into question in good faith and proposes that both are not applicable). The second complainant, Southern Fairway Investments Pty Ltd, entered into a Memorandum of Understanding (MOU) with the defendants. The second defendant, Jakbar Pty Ltd, was a subsidiary of the first defendant, Icon Energy Pty Ltd. As part of the agreement, the parties agreed to negotiate a gas supply agreement (GSA). However, no GSA has ever been concluded between the parties.
As a result, the second applicant opened proceedings against the defendants, who alleged that they had violated the agreement by failing to comply with the promise to negotiate the conclusion of an GSA. The complainant submitted that it had suffered more than $220 million in damages due to the missed opportunity to conclude the GSA.