A clearly drafted contract can be Integral to an application for summary judgment and NOM's the word

A clearly drafted contract can be Integral to an application for summary judgment and NOM's the word

In Integral Petroleum S.A. and others v Bank GPB International S.A. and others [2022] EWHC 659 (Comm), the Commercial Court was required to construe a “no oral variation clause”. Its judgment serves as a warning of the consequences of failing to draft such clauses clearly. It should also remind litigants that applicants for summary judgment will face an uphill struggle if there’s any disagreement on the facts since that disagreement will likely require a trial to resolve.


Integral Petroleum S.A. (Integral) entered into a finance facility (the Facility Agreement) with Bank GPB International S.A. (GPB) in 2019 and drew down a large number of loans under it. From August 2019, Integral and GPB began to discuss restructuring the loans until, in March and April 2020, Integral started to request relief from the payment of default interest.

Beyond this, there was little agreed factual background. Integral’s position was that the parties agreed a repayment plan and GPB would provide further financing only once the terms of a formal restructuring had been approved. In contrast, GPB alleged that draft repayment schedules were exchanged but that was to demonstrate Integral’s ability to repay its debts so it could obtain further credit. The schedules were not an agreement to vary the terms of the loans and it was clear to Integral that no agreement had been reached in that regard. Instead, Integral expressly agreed a maturity date of the loans with the effect that the principal amount owing was overdue.

Integral issued proceedings against GPB seeking damages. GPB counterclaimed, seeking payment from Integral of the principal debt and interest owing under the Facility Agreement and applied for summary judgment on its counterclaims.

The application

A court may give summary judgment where it considers that a defendant has no real prospect of successfully defending a claim. In this case, the judge concluded that GPB did not establish this and dismissed its application.

GPB had argued that, even if Integral established that there had been an oral agreement to vary the payment terms, it would not have been legally binding. One of the bases of that argument was that the Facility Agreement contained a “no oral variation clause”, which was worded as follows: 

“any term of the finance document (i.e. the Facility Agreement) may be amended or waived with the agreement of the borrower in writing”  

GPB’s position was that any amendment to the Facility Agreement must be in writing for those words to have any meaning. In response, Integral argued that the wording did not expressly prohibit oral modification or variation.


The judge considered that interpreting the clause as meaning that amendments could be made without writing would give no meaning to the words “in writing”. However, it was not clear whether any amendment needed to be effected by a written document or simply that the amendment be evidenced in writing. The principles of contractual construction were well-established: the court is obliged to balance the natural meaning of the words used in the clause against the factual context and commercial common sense. In this case, there was fundamental disagreement on the facts which could only be resolved at a trial where the witnesses could be cross examined. The judge neatly summarised her position on the “no oral variation clause” as follows:

“The issue of construction is a mixed question of fact and law and in my view the court cannot be satisfied that it has before it all the evidence necessary for the proper determination of the question of construction…at this interim stage.”


Commercial agreements containing provisions for regular or periodic payments or repayments will often contain “no oral variation clauses” to prevent situations where a party agrees a variation in discussion that it would not have agreed in writing. Such clauses can be an effective way to protect against intemperate agreement if drafted with sufficient clarity. In this instance, however, the clause was not so clear as to allow GPB to obtain summary judgment. Instead, its vagueness means that GPB may now have to pursue its claim to a full trial and deal with the uncertainty of a judicial decision on contractual interpretation.

Where a party’s case relies heavily on witness evidence and there is significant disagreement, the court will invariably need the benefit of cross-examination to reach a verdict. Any application for summary judgment or strike out made against such a backdrop will face insurmountable challenges, and focus might in those circumstances better be applied to producing detailed witness evidence in advance of a full trial rather than seeking summary judgment.   

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