EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Eassie Lord Clarke Lord McEwan	[2011] CSIH 48 CA72/10 OPINION OF THE COURT delivered by LORD CLARKE in the reclaiming motion in the cause G4S CASH CENTRES (UK) LTD Pursuers and Respondents; against CLYDESDALE BANK plc Defenders and Reclaimers: _______

Pursuers and Respondents: Currie QC, Barne; Lesley A Gray, Solicitors

Defenders and Reclaimers: Dean of Faculty (R S Keen QC), Duncan; Dundas & Wilson CS LLP

22 July 2011

[1] The parties are in dispute as to the construction to be placed on provisions of a contract whereby the respondents were to supply services to the reclaimers, the provisions in question relating to the consideration to be paid to the respondents by the reclaimers for those services. The agreement, in question, 6/1 of process, was executed on 2 August 2002. It runs to a total of 309 pages. Its draftsmen, no doubt, were at pains to ensure that all possible matters that might arise out of the parties' transaction would be covered in the agreement and yet, in the event, they were, it seems, unable to produce provisions regarding the key question as to what consideration was payable under the agreement, which were capable of being read in an undisputed way by the parties. The services to be provided by the respondents to the reclaimers were described as "a cash processing service". It appears that the services to be provided were of such a nature that there was, at the commencement of the agreement, no established market for their provision. The agreement, which was intended to run for some years, accordingly, sought to have that fact taken into account by providing for contractual means for the consideration to be paid for the services during the subsistence of the agreement, to be re-visited every two years having regard to similar services offered by others in the market or that could, in any event, be obtained by the reclaimers from a third party. That contractual machinery was designed to protect the reclaimers against paying too much for the services in question having regard to the aforementioned factors and for a consequent adjustment downwards of the consideration payable by the reclaimers, in the light of that being justified in accordance with the outcome of employing the agreed contractual procedures. The procedures are described in the agreement as "Benchmarking". That expression is defined in Part 1 of the schedule to the agreement as meaning "the benchmarking of the Services, and the Service Levels and the Service Fees in accordance with Clause 3.11 and part 13 of the schedule."

[2] As well as providing for that machinery the parties agreed that, in any event, the services fees, which were agreed to be payable at the commencement of the agreement, and up until the seventh anniversary of the commencement date, should be reviewed at that date. The dispute between the parties relates to how the fees chargeable after the seventh anniversary of the commencement date of the agreement are to be calculated. The position adopted by the reclaimers to the construction of the relevant provisions is that any increase in the service fees payable after the seventh anniversary date depends on the reclaimers' absolute discretion. The respondents, on the other hand, contend that the provisions do not have that effect. In this commercial action the respondents seek a declarator which seeks to negative the construction placed on the relevant provisions by the reclaimers. It is in the following terms:

"For declarator that, in relation to the determination of the level of Service Fees payable by the defender to the pursuer under the Services Agreement between the pursuer, the defender and Securicor Group Limited dated 2 August 2002 ('the Agreement'), clause 2.2 of the Agreement does not have the effect of making any increase in the Services Fees payable by the defender to the pursuer from the seventh anniversary of the Service Commencement Date, as defined in the Agreement, dependant on the defender's absolute discretion".

[3] The respondents originally sought a further declarator which was in the following terms:

"For declarator that, under reference to the Service Agreement between the pursuer, the defender and Securicor Group Limited dated 2 August 2002 ('the Agreement'), the second last sentence of paragraph 1.3 of part 13 of the schedule to the Agreement does not apply to a benchmarking of the Services Fees undertaken in terms of clause 2.2 of the Agreement for the purposes of determining the Services Fees payable for the Services with effect from the seventh anniversary of the Service Commencement Date".

[4] The respondents, through their counsel, indicated that they would not be moving for that conclusion to be granted.

[5] It is now appropriate to set out the precise terms of the agreement around which the dispute in this case revolves.

[6] They are as follows:

"Interpretation

1.2 In this Agreement ...

1.2.2 headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement: ...

2 Duration

Term

2.1 The Agreement shall commence on the Commencement date and shall continue until the Expiry Date unless and until terminated earlier in accordance with the provisions of clause 2.2, clause 2.3, clause 7.12 or clause 22.

Benchmarking

2.2 No later than the sixth anniversary of the Service Commencement Date, the Bank shall undertake a review of the Services Fees (which may include a bench marking of the Services Fees by the Bank in accordance with part 13 of the Schedule) with a view to determining the Services Fees payable for the Services, with effect from the seventh anniversary of the Service Commencement Date and shall deliver the results thereof to the Supplier. The parties shall negotiate in good faith to agree such Services Fees based on the results of the review (or such benchmarking) and any dispute shall be resolved in accordance with clause 12 (provided that in no circumstances shall the annual Services Fees be reduced by more than 12.5% from the amount of the annual Services Fees payable as at the seventh anniversary of the Service Commencement Date unless the Supplier otherwise agrees). If (a) the Services Fees have not been agreed or determined within four months of notification by the Bank to the Supplier of the results of the review or such benchmarking (or within such longer period as may be agreed between the parties) or, (b) the Bank does not agree the amount of any Services Fees calculated as aforesaid, the Bank may terminate this Agreement with effect from the seventh anniversary of the Service Commencement Date by giving to the Supplier at least three months notice in writing to that effect in which case this Agreement shall terminate on the seventh anniversary of the Service Commencement Date.

....

Payment

Services Fees

4.1 In consideration of the provision of the Services in accordance with the terms of this Agreement, the Bank shall pay to the Supplier the Services Fees calculated in accordance with the terms of Part 5 of the Schedule less any Service Credits payable in accordance with Clause 3.6.

12 Disputes

12.1 Where there is no other dispute or escalation procedure specified in this Agreement for a dispute between the parties arising out of or relating to this Agreement, that dispute shall be referred by either party, first, to the parties Contract Managers.

12.2 In respect of matters of disputes arising out of or relating to this Agreement which cannot be resolved under clause 12.1, the parties shall submit such matter or dispute to review by a Review Board [as defined] which shall act as conciliator in which capacity it may:

12.2.1 conduct the conciliation process in whatever manner it considers to be appropriate;

12.2.2 Issue the Supplier and the Bank its conclusion and/or recommendations in relation to the dispute. Any conclusions and/or recommendations of the Review Board shall not be binding upon the Supplier or the Bank.

....

12.5 Notwithstanding any reference to conciliation before the Review Board of a dispute or matter pursuant to clause 12.2. but subject to clause 12.7, either the Supplier or the Bank may (whether the conciliation subsists or not) refer the said dispute or matter to the courts of Scotland for determination.

....

12.7 Any dispute arising in relation to the Agreement may if the Supplier and the Bank so agree in writing, be referred to and finally determined by:

12.7.1 The Review Board; or

12.7.2 an independent expert agreed between them;

in each case acting as expert and not arbiter and any decision of such expert shall save in the case of fraud or manifest error, be conclusive and binding on the Supplier and the Bank;

12.8 Subject to Clause 12.7 the Supplier and the Bank hereby irrevocably submit to the non-exclusive jurisdiction of the courts of Scotland for the purpose of any dispute or matter arising out of or in relation to this Agreement.

[7] Paragraph 1 of part 5 of the Schedule provides inter alia as follows:

"1 Services Fees

1.1 The Services Fees payable by the Bank under this Agreement shall be the sum of:

1.1.1 from the Service Commencement Date to the Transition Completion Date, £140,250 per Month (or pro rata for any period of less than a Month);

1.1.2 From the Transition Completion Date to the seventh anniversary of the Services Commencement Date, £129,000 per Month, or such other amount as may be determined under paragraph 1.2 (or pro rata for any period of less than a Month) subject indexation adjustment in term of paragraph 1.3.

1.2 The Services Fees payable by the Bank under this Agreement from the seventh anniversary of the Service Commencement Date shall be determined in accordance with clause 2.2.

1.3 If the Indexation Increase in any Year is greater than 4 per cent, the Services Fees for the following Year shall be adjusted by a percentage equal to the Indexation Increase less 4 per cent. If the Indexation Increase in any Year is less than or equal to 4 per cent, the Services Fees shall remain unchanged for the following Year."

The Benchmarking Procedures

Part 13 of the Schedule

[8] Part 13 of the schedule deals with benchmarking and provides inter alia as follows:

"1.1 Notwithstanding any other provision in this Agreement, the Bank reserves the right at any time after the second anniversary of the Commencement Date to require the supplier to allow the Bank to conduct Benchmarking in accordance with this Part 13 of this Schedule with similar services offered on the market or that could be obtained by the Bank from a third party, provided that the Bank shall not be entitled to exercise this right more than once during any consecutive 24 month period after the second anniversary of the Commencement Date other than for the purposes of clause 2.2.

1.2 In the event that the Bank notifies the Supplier that it is exercising its right under this Part of the Schedule in relation to all or any part of the Services, the Supplier shall co-operate with the Bank and the following procedures shall apply:

1.2.1 the Bank shall appoint an independent third party whose identity has been approved by the Supplier (such approval not to be unreasonably withheld or delayed) (the nominated person) to carry out an analysis of the Services and Service Levels and Services Fees and to identify whether or not it or they are competitive in the market (benchmarking analysis);

1.2.2 the Supplier shall co-operate in good faith with the nominated person in carrying out the benchmarking analysis. The nominated person shall take into account all the circumstances relevant to the Suppliers provision of the Services including the following:

(a) the range and scope of the Services being provided; and

(b) any other factors identified by the Bank or the Supplier which, if not taken into consideration, could unfairly cause the Supplier's provision of the Services or the Service Levels or the Services Fees to appear non-competitive;

1.2.3 subject to paragraph 1.2.4, the cost of carrying out the bench-marking analysis shall be borne by the Bank;

1.2.2 if the Benchmarking Report recommends a fundamental decrease in the Services Fees and the fundamental decrease in the Services Fees is accepted by the Supplier, or determined under paragraph 1.3.3, and the change is implemented under paragraph 1.3.2 the Supplier shall reimburse the Bank in respect of the reasonably and properly incurred fees it has incurred in appointing the nominated persons. For the purposes of this paragraph a fundamental decrease in the Services Fees shall be a decrease which would on an annualised basis provide a decrease in the total amount of the Services Fees equal to or more than 10%;

1.2.5 the nominated person shall, using well established and market accepted statistical and analytical approaches, prepare a Benchmarking Report for the Bank covering all aspects of the benchmarking analysis including a conclusion as to whether the performance of the Services and/or Service Levels and/or the Services Fees are competitive in the market place and, if not, recommending changes to the Services and/or Service Levels and/or any reduction in the Services Fees. The Bank shall provide to the Supplier a copy of the report or relevant extracts insofar as it relates to the Services and invite comments from the Supplier on the findings and recommendations in the Benchmarking Report;"...

1.3 If the conclusion to the Benchmarking Report recommends changes to the Services and/or Service Levels and/or any reduction in the Services Fees:

1.3.1 The Supplier shall have the opportunity of making representations to the Bank with a view to establishing whether the recommendation contained in the Benchmarking Report would have the effects envisaged by the Benchmarking Report;

1.3.2 In the absence of any representations made pursuant to paragraph 1.3.1 or in respect of a Benchmarking Report in respect of which the Supplier and the Bank both agree with the recommendations made in the Benchmarking Reports conclusion, the Supplier shall amend the Services and/or the Service Levels and/or the Services Fees in accordance with the recommendations made in the conclusion of the Benchmarking Report"...

provided always that the nature of the Change, including changes to the Services, the Service Levels and any reduction in the Services Fees shall be as stipulated in the Benchmarking Report or as otherwise agreed in writing by the Bank and the Supplier; and

1.3.3       Where the Supplier makes representations pursuant to paragraph 1.3.1 or otherwise where the Supplier does not agree with the recommendations made in the Benchmarking Reports conclusion, the matter shall be dealt with as a dispute in accordance with clauses 12.1 to 12.6 (inclusive) and, if not determined in accordance with those Clauses, the dispute shall be determined by an expert in accordance with Clause 12.7.2 and, where determined in favour of the Bank, the Supplier shall implement the recommendations contained in the Benchmarking Report (as modified, if relevant, in terms of the resolution of that dispute) in accordance with paragraph 1.3.2.

For the avoidance of doubt, in no circumstances there shall be any increase in the Service Fees consequent on a Benchmarking Report unless the Bank agrees to this in its absolute discretion. If requested by the Bank, the Supplier shall provide the Bank with such information as the Bank may reasonably require in relation to the Supplier's input costs identified in the Costing Model".

The Dispute

A. The Respondents' Case

[9] What has happened is that in anticipation of the seventh anniversary of the commencement date the reclaimers instructed a benchmarking exercise to be carried out by KPMG who produced a draft which is dated 20 July 2009 and is No. 6/2 of process. The respondents' position was that the tail-piece in clause 1.3.3 of part 13 of the schedule to the effect "for the avoidance of doubt in no circumstances shall there be any increase in the Services Fees consequent on a Benchmarking Report unless the Bank agrees to this in its absolute discretion" was not intended to apply when the parties were engaged in a clause 2.2 exercise. Those provisions, it was submitted, were to ensure, that if, and when, the reclaimers exercised their right to have a benchmarking exercise carried out (a right exercisable by them alone) their contractual rights to receive the relevant services for the first seven year period of the contract would not be subject to charges higher than those set out in part 5 of the schedule. That protection did not, however, arise when the exercise which was being carried out was the calculation of the Services Fees payable under the agreement from the seventh anniversary as determined by the provisions of clause 2.2. The process provided for under clause 2.2 of the agreement was, it was submitted by the respondents, different from the benchmarking exercise provided for under part 13 of the schedule. While it was true that clause 2.2 was headed "Benchmarking", that did not affect the construction of this clause because of the provisions of clause 1.2.2. A benchmarking exercise to be conducted, in terms of part 13 of the schedule, might recommend changes to the services and/or service levels and/or any reduction in the service fees. By contrast, the review to be conducted in terms of clause 2.2 was confined to a review of the services fees and did not include a review of the services and/or services levels as provided for in a part 13 benchmarking exercise. In addition, in terms of the agreement there required to be a clause 2.2 review, whereas a part 13 benchmarking exercise outwith the provisions of clause 2.2, was discretionary and could only be initiated by the reclaimers. It was to be noted that while a clause 2.2 review might include a benchmarking of the service fees it did not need to do so. Whether or not a benchmarking of the services fees is carried out, as part of the procedures under clause 2.2, the clause requires the parties to negotiate, in good faith, to agree services fees and to have any dispute resolved in accordance with clause 12.

[10] The reclaimers, it was submitted, had a powerful right under clause 2.2 since it provides that if they did not agree to the amount of any service fees calculated, as provided for in terms of clause 2.2, then they could terminate the agreement, with effect from the seventh anniversary of the commencement date, by giving to the respondents at least three months notice in writing to that effect, in which case the agreement would terminate on the seventh anniversary of the services commencement date. That, it was contended, was a strong indication that charges payable under the agreement, after the seventh anniversary date, as calculated in terms of clause 2.2, could either involve an increase in, or a decrease from, what was previously charged. It was unlikely that the reclaimers would wish to terminate the agreement because they did not agree to a reduction in the charges. If the construction of the relevant provisions by the reclaimers was correct then, apart from index adjustment, the services fees could not be increased for the final five year period of the agreement. Had that been the parties' intention, clause 2.2 was not required. It would be otiose.

The reclaimers' case

[11] The reclaimers, on the other hand, maintained that the construction which they advanced in relation to clause 2.2 made commercial sense. There was nothing commercially absurd, or unreasonable, for having an adjustment of charges, and the like, in a long-running contract on a downward basis only. Adjustment in one direction only was frequently the position, it was said, in rent review clauses. The lack of an established market for the services in question, in the present case, would justify such provisions. The purpose of clause 2.2 was to obtain a determination of the service fees payable with effect from the seventh anniversary date. Determination, it was submitted, was quite different from agreement. Unless there was a procedure provided for determination, all there was, was an agreement to agree. There had to be machinery in the agreement which provided for a determination so that the agreement was enforceable. Clause 12 did not provide for determination, it provided for conciliation and agreement and did not oblige either party to agree to a final determination. Clause 2.2 provided for two means for arriving at the services fees payable after the seventh anniversary, the first being agreement, the second being by a determination in terms of paragraph 1.3.3 of part 13 of the schedule, which provides in respect of benchmarking that a dispute should be determined by an expert. If there was agreement between the parties under clause 2.2 and no determination by an expert under paragraph 1.3.3 of part 13 of the Schedule, the contract would continue on its existing terms until the expiry date. In sum, paragraph 1.2 of part 5 of the schedule provides that the services fees payable from the seventh anniversary shall be determined in accordance with clause 2.2. This, it was contended, must mean (a) by agreement, (b) by a bench-marking exercise in terms of part 13 of the schedule with a resulting determination by an independent expert, or (c) in the absence of the foregoing, the services fees would remain as they were prior to the seventh anniversary. If there was a benchmarking exercise carried out then part 13 made it clear that there could be no increase in the services fees, unless this was agreed to by the reclaimers. The respondents attempt at rebuttal of the reclaimers' argument to the effect that their construction of the agreement of the relevant provisions produced an unenforceable agreement, was misconceived, relying as it did, on the provisions of clause 12 in respect of dispute resolution. What was missing in clause 12 was any means by which the Court would be in a position to arrive at the appropriate fee chargeable. Matters were, accordingly, left completely in the air as to how the fee was to be "determined".

The Lord Ordinary's Decision

[12] Having considered the foregoing arguments and others, the Lord Ordinary preferred the position advanced on behalf of the respondents. He sustained their first plea-in-law to the extent of granting decree in terms of the first conclusion of the summons and repelled the reclaimers' plea-in-laws. In doing so, his Lordship stressed that, in his judgement, the clause 2.2 review was a different and distinct procedure from a benchmarking exercise under part 13 of the schedule. As he put matters at paragraph 23 of his opinion: "The review is greater that (sic) any benchmarking conducted as part of it. It has a different purpose, and a different focus. It may include a benchmarking of the Service Fees, but whether or not such a benchmarking has been carried out, it is clear that it cannot be the sum total of the review which clause 2.2 requires the Bank to undertake. It is the review which is to be undertaken with a view to determining the Services Fees payable with effect from the seventh anniversary, and it is the results of the review (not just the results of any bench-marking of Services Fees which may have been undertaken as part of that review) which must form the basis for negotiations in good faith between the parties to agree the Services Fees for the period after the seventh anniversary." His Lordship also observed, at paragraph 25 of his opinion, "I agree with senior counsel for the pursuers that clause 2.2 does not import the provision as to Benchmarking in part 13 of the Schedule wholesale. That is because it is concerned not with a Benchmarking exercise (which by definition includes consideration of Services and Service Levels), but only with the benchmarking of Service Fees. I do not consider the construction of clause 2.2 contended for by the defenders to the effect that Services Fees for the period after the seventh anniversary can only reduce or remain at their existing level but cannot be increased as a result of a clause 2.2 review is correct. If it were correct, there would be little, if any point to clause 2.2.

[13] As regards the reclaimers' argument that the construction placed by the respondents on clause 2.2 was productive simply of an unenforceable agreement to agree, the Lord Ordinary, in the event, rejected that contention, at paragraph 27 of his opinion, when he said "... clause 2.2 provides that any dispute shall be resolved in accordance with clause 12; although clause 12 contains much about negotiation and conciliation procedures, clause 12.5 makes clear provision for any dispute to be referred by either party at any time to the courts of Scotland for determination. This applies both to a clause 2.2 review, and to a part 13 Benchmarking. I consider that if negotiations based on the results of a clause 2.2 review are not successful, this must constitute a dispute between the parties which would entitle either party to refer the matter for determination to the courts. It follows that this is not merely an agreement to agree, but an enforceable contractual provision for the determination of disputed Services Fees in the relevant period."

Debate before the Court

[14] Before this court, the Dean of Faculty, in moving the reclaiming motion renewed the submissions made before the Lord Ordinary, but focussed heavily on the argument that the respondents' position resulted in an unenforceable agreement to agree. Moreover, it was submitted, it was inherently improbable that the parties should have decided that, failing agreement between themselves as to the level of service fees, and after conciliation attempts provided for in terms of the agreement, they would leave the court to determine the appropriate level of service fees for the remainder of the contract's term with no express reference as to the basis upon which the court could arrive at what was appropriate in the circumstances. The respondents' position, it was argued, implied into a highly detailed contract terms which were not there, and of necessity engaged the court to enforce those terms. It was inherently unlikely that parties would have chosen that route to fix the level of service fees. Under reference to Mamidoil-Jetoil Greek Petroleum Co v Okta Crude Oil Refinery [2001] to Lloyds Rep, 76 and R & D Construction Group Ltd v Hallam Land Management Ltd 2011 SLT 326, the Dean of Faculty accepted that it was possible for parties to provide in an agreement, which was intended to run for a significant period of time, that certain matters as regards the continuing enforcement of the contract, could be determined by an arbiter or by a court in the absence of an agreement on the matter in question between the parties. The position, however, it was submitted was different here because clause 2.2 had to be read as the parties' agreement as to how the matter in issue was to be determined and it had to be construed to give effect to the intention as so expressed. Reference of this connection was made to the dictum of Goff LJ (as he then was) in Beer v Bowden [1981] 1 W LR 522 at page 527 E to F where his Lordship said "Now, the contract must imply a term in order to give business efficacy to the contract, and I ask myself: why should it choose the alternative which is inconsistent with the basis which the parties showed they contemplated, rather than the one that implements it?". The approach of the respondents, followed by the Lord Ordinary, was that the provisions of part 13 of the Schedule were not to be imported "wholesale" into clause 2.2. That left open the question what were the provisions of part 13 which were to be incorporated.

[15] Senior counsel for the respondents invited the court to refuse the reclaiming motion. Three main issues, it was submitted, arose:

1.     The first key issue was that in considering the relevant provisions one was concerned with a mandatory review of the service charges and not an optional benchmarking exercise under schedule 1, part 13.

2.     The reliance placed by the reclaimers on the theory of "inherent improbability" was completely misconceived. The case of Mamidoil-Jetoil was support for the legitimacy, and appropriateness, of parties to a long-term contract making provision for the ultimate determination of a matter in dispute between them being made by an arbiter or the courts.

3.     The respondents' approach to the construction of the relevant terms produced a coherent contractual scheme, whereas the reclaimers approach did not.

Senior counsel for the respondents in support of the last-mentioned point referred to clauses 2.1, 4.1, and part 5 of the schedule and submitted that those provisions fixed the service fees payable until the seventh anniversary of the commencement date. After the seventh anniversary date the provisions of clause 2.2 provided for how the fees should be fixed. That was clearly intended by the parties to be a distinct and different process from what obtained in relation to the fixing of fees during the first seven years of the agreement's currency. While there were distinct dispute resolution procedures provided for in respect of the benchmarking exercise and the clause 2.2 procedure, it was important that clause 12.5 provided that either party to the contract might refer a dispute about the contract to the courts for determination. There was, accordingly, expressly provided by the parties a role for the court in relation to disputes about the appropriate post seventh anniversary charges. It was clear, it was submitted, that the "benchmarking" referred to in clause 2.2 was not intended to be the full Benchmarking exercise in terms of part 13 of the schedule. What KPMG had done in their report was a limited exercise for the purposes of clause 2.2. It was there as a contribution towards the parties' efforts to reach agreement regarding the post seventh anniversary service charges. The reclaimers' approach to the construction of the provisions carried with it the consequence that a significant amount of what was provided for in the agreement was redundant. Moreover the word "review" in clause 2.2 while not defined, was clearly intended to be something different from benchmarking. If the reclaimers were correct there could never be an upward increase in services charges under the agreement unless the reclaimers accepted that this was appropriate. If that were so why, Senior Counsel asked, not just abandon the notion of review as set out in clause 2.2 and rely simply on the benchmarking machinery provided for in part 13 of the schedule. The fact that the word "review" was used and that it was mandatory, whereas the exercise of benchmarking could only be triggered by the respondents, suggested strongly that clause 2.2 was providing for a machinery to fix the charges with potential benefit to both parties. Clause 2.2 expressly provided that the reclaimers had the right to bring the agreement to an end if they did not agree to service fees calculated in terms of clause 2.2. That provision strongly supported the respondents' approach to the construction of the provisions for it was hardly likely that the reclaimers would wish to cancel the agreement in the event of the calculation producing a reduction in the service charges.

Decision

[16] Having considered the submissions made to us, we have reached the conclusion that the Lord Ordinary was well founded in holding that the construction placed on the relevant provisions by the respondents was to be preferred to that which was placed upon them by the reclaimers. In particular we consider unsound the submission pressed forcefully upon us by the Dean of Faculty that the construction advanced by the respondents produced an unworkable or unenforceable agreement, or was inherently improbable having regard to the result that it produced. The parties, who may not be able to arrive at an agreement under clause 2.2 as to the future charges, having negotiated in good faith, are then obliged to employ the provisions of clause 12. The agreement does not, in our view, produce simply an agreement to agree or an agreement so uncertain as to be unenforceable. The dictum of Rix LJ in Mamidoil-Jetoil at para 67, in our view, meets the points. As his Lordship said "There is, in my view, implicit support here for the doctrine that in a commercial contract which, when dealing with the future and sometimes the long- term future of necessity leaves certain matters such as price to be worked out over time, an arbitration clause assists the Court to find sufficient certainty by means of the implication of what is reasonable. Which is not to say, that the Court will not itself provide the dispute resolution machinery, even in the absence of an arbitration clause". The kind of situation referred to in that passage, and what might be provided in relation to it, is also reflected in what was said by Lord Drummond Young in R & D Construction Group Ltd supra at pages 340 to 341. The misconception in the reclaimers' submission on this topic is that it fails to recognise that although consensus in idem is required before a contract can come into existence between the parties, it does not follow that there is simply an agreement to agree, in a contract designed to endure for some time, while there remains to be agreed something with affects the contractual relationship - see Avintair Ltd v Ryder Airline Services Ltd 1994 SC 270. For parties in a commercial, long running, contract to leave matters on such a footing is not "inherently improbable" but is commonplace in complex contractual arrangements intended to endure for substantial periods of time during changing circumstances. As to the rest, the respondents made some very powerful points in support of their construction to which reference has been made earlier in this opinion, for example, the construction favoured by the reclaimers has the effect of rendering the provisions of clause 2.2 virtually otiose. What is provided for in clause 2.2 is a mandatory review which is to be contrasted with the bench-marking exercise which is triggered at the sole discretion of the reclaimers. As the respondents contended that points to the provisions of clause 2.2 being intended by the parties to have at least the potential for benefit to both parties.

[17] Ultimately, in our opinion, the reference to a "benchmarking of the services fees" in clause 2.2 is simply a reference to a means of producing evidence, or material, which may be used by the parties in their bona fide negotiations towards seeking an agreement about the level of the services fees but does not carry with it the qualification that the fees may only be increased if the reclaimers agree. Whatever any clause 2.2 benchmarking exercise produced would not prevent an increase in the service fees if that was the appropriate outcome of the review exercise as a whole.

[18] For these reasons we consider that the Lord Ordinary arrived at the correct conclusion in this case. We shall, accordingly, refuse the reclaiming motion and adhere to the interlocutor of the Lord Ordinary.