Every once in a while, an important decision comes along which should be put in your hip pocket so that it can be pulled out when needed. Rainy Sky S.A. v. Kookmin Bank is such a decision. In this decision, the U.K. Supreme Court (formerly the House of Lords) recently held that if there is a choice between interpretations of an agreement, the commercially sensible one should be adopted.

That principle may not be rocket science, but it is crucially important. We now have a judgment that we can rely upon for a crucial principle: the commercially sensible interpretation of a contract prevails, even if another interpretation is arguable.

arbitration agreement, interpretation, agreement, bonds, building contract