King Crude Carriers v Ridgebury: The Supreme Court Rejects “Deemed Fulfilment” in English Law

1 December 2025

The Supreme Court’s unanimous decision in King Crude Carriers SA v Ridgebury November LLC [2025] UKSC 39 has resolved a question of considerable commercial importance to the shipping industry: the status of deposits under the Norwegian Saleform (NSF), and the availability of the doctrine of “deemed fulfilment” in English law.

The Background

The case arises from three separate memoranda of agreement (MoAs) for the sale and purchase of oil tankers, all on the industry-standard 2012 version of the Norwegian Saleform. In each case, the buyers fail to provide the documents necessary to open escrow accounts for the payment of the contractual deposits. The sellers terminate the MoAs and commence LMAA arbitrations, seeking payment of the deposits as a debt—not as damages.

The distinction between debt and damages is not merely theoretical. A claim in debt does not require proof of loss, is not subject to the duty to mitigate, and may carry different limitation and interest consequences. For the sellers, characterising the deposit as an accrued debt payable regardless of the buyers’ failure to open escrow is commercially attractive.

The Journey Through the Courts

The London arbitrators initially hold in the sellers’ favour, finding that the deposits are payable as debts. The Commercial Court reverses this in 2023, holding that the deposit provisions are conditions precedent—meaning the obligation to pay the deposit only arises if and when the escrow conditions are fulfilled. The Court of Appeal, in 2024, reinstates the arbitrators’ awards, relying in part on the Scottish doctrine of deemed fulfilment derived from Mackay v Dick (1881) 6 App Cas 251.

The deemed fulfilment doctrine, broadly stated, provides that where a party to a contract prevents the fulfilment of a condition precedent, the condition may be treated as fulfilled.

The Supreme Court’s Decision

The Supreme Court unanimously allows the buyers’ appeals, holding that the doctrine of deemed fulfilment does not form part of English law. The court examines the historical basis for the doctrine, its reception in Scots law, and the attempts to transplant it into the English common law, concluding that it is neither supported by authority nor consistent with principle.

The court holds that Clause 2 of the Norwegian Saleform establishes genuine conditions precedent to the obligation to pay the deposit. Where those conditions are not fulfilled—whether through the buyers’ fault or otherwise—the deposit does not become due as a debt. The sellers’ remedy lies in damages, not debt.

Significance for the Shipping Industry

The decision has immediate practical significance for ship sale and purchase transactions. It confirms that sellers relying on the standard NSF terms cannot recover unpaid deposits as debts where the contractual preconditions for payment have not been met. In practice, this means that sellers in such circumstances must prove their loss and are subject to the ordinary principles of mitigation and remoteness—as established in cases such as Hadley v Baxendale (1854) 9 Exch 341 and The Achilleas [2008] UKHL 48.

More broadly, the rejection of deemed fulfilment as a doctrine of English law provides clarity in an area that has been the subject of uncertainty and academic debate. Practitioners advising on conditional obligations—not only in shipping but across commercial law—can now proceed with confidence that English law does not recognise a freestanding principle of deemed fulfilment.

Those advising buyers and sellers on NSF transactions should review their standard form amendments in light of this decision. Sellers who wish to preserve the ability to claim a deposit as a debt would be well advised to draft the deposit provisions as unconditional obligations rather than relying on the standard Clause 2 machinery.