- with readers working within the Oil & Gas industries
- within Environment, Litigation and Mediation & Arbitration topic(s)
Recently, the Court of Appeal in Kulkarni v Gwent Holdings Ltd & Anor [2025] EWCA Civ 1206 (26 September 2025) held that a repudiatory breach is not automatically incapable of remedy for the purposes of a contract.
This case involved a shareholders' agreement between two shareholders. Within the shareholders' agreement there was a clause stating that a shareholder was deemed to have served a notice to transfer its shares if it committed a material or persistent breach which, if capable of remedy, was not remedied within ten business days of being notified to do so.
This is not an uncommon clause and one of the shareholders committed several breaches which included allotting shares to itself that were allocated to the other shareholder and purporting to terminate the shareholders agreement and admitted as much that its breaches were material and repudiatory.
The innocent shareholder therefore argued that, as a matter of law, a repudiatory breach can never be remedied and relied on case law that determined that, once a repudiatory breach has been committed, the innocent party can decide whether to affirm the contract or to terminate.
In this instance, the Court held that a repudiatory breach of the shareholders' agreement was not necessarily incapable of remedy and that the case law cited addressed the consequences of a repudiatory breach at common law and did not concern itself with whether a breach was capable or remedy within the meaning of a contractual clause.
It opined that, where a party wanted a repudiatory breach to be irremediable, they could have provided for that in the contract which the shareholders. The breaches concerned were capable of remedy by the return of the shares and the acceptance by the defaulting shareholder that its termination notice was ineffective; the common law rules of repudiation therefore have no place.
This finding also reinforces the long held notion that Courts will increasing look to interpret contracts as they are expressly drafted rather than imputing that which it does not.
You should therefore be mindful then that where a contract provides for a breach to be remediable (which is not uncommon), whether or not the breaches are made deliberately or wilfully does not render them any less capable of being remedied. You may find however that unwinding the breach in this way perhaps provides less than satisfactory results.
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