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'All reasonable endeavours': latest developments

What efforts does a party need to take to satisfy an obligation to use "all reasonable endeavours"?

In the recent case of Astor Management AG v Atalaya Mining plc [2017], the High Court disagreed with previous observations that an endeavours obligation is only enforceable if its object is certain and there are sufficient objective criteria to evaluate the attempt.

Instead, the judge considered that where a contract includes a test of "reasonableness", the parties are "deliberately inviting the court to make a value judgment" and the court should not decline to do so simply because the task is difficult.  In this case, the court found that there was a legally enforceable obligation to use all reasonable endeavours to obtain a senior debt facility, even though that facility could have taken many different forms.


The case involved the sale by Astor Management AG (Astor) of its interest in a dormant copper mine to Atalaya Mining plc (Atalaya). Payment of most of the consideration was deferred. The sale agreement provided that payment of the deferred consideration would be triggered when Atalaya secured a senior debt facility sufficient to restart the mining operations. Atalaya was required to use all reasonable endeavours to obtain the facility by 31 December 2010.

The facility was not obtained by the target date and instead, funds were raised from the parent company before mining restarted. Astor claimed that the deferred payment requirement had been triggered, regardless of whether the facility had been put in place. In the alternative, Astor claimed that Atalaya was in breach of its endeavours obligation and/or had acted in breach of an implied obligation of good faith.

Amongst other issues, the court was asked to consider whether there was a legally enforceable obligation to obtain the facility, and alternatively whether there was an implied duty of good faith.

Was the endeavours clause enforceable?

Atalaya sought to rely on the case of Dany Lions Ltd v Bristol Cars Ltd [2014] in its submission that an obligation to use reasonable endeavours was only enforceable if:

  • the object of the endeavours is sufficiently certain; and
  • there are sufficient objective criteria by which to evaluate the reasonableness of the endeavours.

The High Court disagreed, the judge stating:

"The role of the court in a commercial dispute is to give legal effect to what the parties have agreed, not to throw its hands in the air and refuse to do so because the parties have not made its task easy."

The judge went on to say that it should almost always be possible to give "sensible content" to an undertaking to use reasonable endeavours (or indeed "all reasonable endeavours" or "best endeavours") to enter into an agreement with a third party. The object of the endeavours should be sufficiently certain, since there is no inherent difficulty in deciding if an agreement has been reached with a third party. 

Whether or not the relevant party has endeavoured to make such an agreement is a question of fact which the court can decide. The burden of proof falls on the party alleging failure to comply with the obligation. Although lack of objective criteria can make it difficult for that party to prove a breach, this does not mean that there is no obligation at all or that the obligation has no sensible content.

In this case, the fact that the senior debt facility could have taken many different forms did not make the object of the endeavours insufficiently certain or excuse Atalaya from making any effort to obtain finance.

Regard to own financial interests?

On the evidence, the court decided that Atalaya was not in breach of the obligation. Astor could not show that there was a viable option for obtaining finance that Atalaya should have pursued.

The extent to which a party who has undertaken to use "best" or "all reasonable" endeavours can have regard to its own financial interests depends on the nature and terms of the contract in question. It was clearly in Atalaya's interest to fund the mining operations without obtaining a senior debt facility, since this would avoid triggering the payment of the deferred consideration. However, this could not in itself be a legitimate reason, since it would frustrate the purpose of the endeavours clause.

The judge stated that it did not follow, however, that financial considerations were irrelevant. Atalaya could not be expected to try to obtain the facility at any cost, if this would make the project commercially unviable.

Good faith

Astor alleged that Atalaya owed an implied obligation of good faith and that by securing funding in a way that avoided the trigger of the payment of the deferred consideration, it was in breach of that general duty. The judge dealt with this argument briefly, concluding that there was no requirement to imply a duty of good faith in this case since the requirement was subsumed within the express obligation to use all reasonable endeavours.

What are the implications?

The case shows a greater willingness by the court to enforce an endeavours clause where the object is a contract with a third party, even where there is a lack of objective criteria.  In fact, the judge considered that where the parties have adopted a test of reasonableness, they are inviting the court to make a value judgment.

If parties would prefer to avoid asking the court for its 'value judgment' however, it is advisable to be as specific as possible about what the obligation entails. Wherever possible, the parties should clarify the steps required to fulfil an obligation, how long that obligation should last and the consequences of failing to fulfil the obligation.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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