These two cases upheld the same principle about damages to arise from a breach


Both the Alfred McAlpine and the Azimut-Benetti cases (as well as the Philips vs AG Hong Kong which preceded them) uphold the principle that a forensic analysis of the likely damages to arise from a breach will not be held as evidence that a clause is a penalty (page 52, 27 July). To over-turn a figure it has to be shown that the dominant purpose of the sum is as a deterrent.

This (purposive) approach is mirrored in the Rainy Sky vs Kookmin case where the court preferred an interpretation of a contract which upheld the parties commercial intentions.

Sarah Fox, via