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'''Decision of the High Court'''
The High Court Judge held that a binding contract of sale and purch”ase purchase of coal had been concluded on the basis of the First Four Emails, as both parties had the intention to create legal relations and that the agreement was certain and complete. The Judge found that China Coal was liable for about US$1.6 million in damages and interest.
'''Appellant’s Appeal on Liability'''
The Court of Appeal said that the dispute turned on the characterization of the First Four Emails and found that parties did not intend to create legal relations on the basis of the emails alone. The emails were part of “one single transaction” governed by Avra’s standard terms, including the subject-to-signature proviso.
The wording of Clause 26 is a was key to establishing whether a binding contract had existed between the parties. Paragraph 2 and paragraph 3 of the Clause, stated that:
“This Agreement shall only come into force after being signed by both the Buyer and the Seller....
“the Buyer’s nomination of a performing vessel shall signify binding acceptance of all the terms and conditions of this agreement, even if the Buyer has not executed this agreement.”