Kyrwood v Drinkwater

The parties to this dispute were Kyrwood and Drinkwater. The central issue concerned the termination of a contract, specifically whether a party's right to terminate for breach by the other party was precluded by the first party's own prior breach or by a causal relationship between the breaches.

The court was required to determine whether the doctrine of repudiation and non-performance applied in circumstances where the party seeking to terminate had itself breached the contract, or where the other party's breach was causally linked to the first party's repudiation. A further question arose as to whether mutual obligations between parties to an arbitration agreement were interdependent, and if so, how that impacted the ability to rely on the other party's breach as repudiation.

The majority of the court held that the right to terminate for repudiation was not available if the first party's own breach caused or contributed to the other party's repudiatory conduct, or if the other party's breach itself amounted to a repudiation. The court drew upon English House of Lords decisions in *Bremen Vulkan Schiffbau und Maschinerfabrick v South India Shipping Corporation Ltd* and *Paal Wilson and Co A/S v Partenreederei (The Hannah Blumenthal)*. These cases established that where both parties owe mutual obligations to progress an arbitration, neither party can rely on the other's delay or breach as a repudiation if that delay or breach is a consequence of their own failure to fulfil those mutual obligations. The court found that the concept of mutual obligations was essential to the reasoning in these authorities.

By majority, the appeal was dismissed.