No overriding duty to act in good faith but implied term to act in a manner that is not arbitrary, irrational or capricious (TCC)

In Portsmouth City Council v Ensign Highways Ltd [2015] EWHC 1969 (TCC), Edwards-Stuart J in the Technology and Construction Court (TCC) determined an issue of contract interpretation relating to the award of service points under a PFI contract in favour of Ensign. The court held that there was no overriding obligation on the council to act in good faith when awarding service points but there was an implied term that the council had to act honestly and on proper grounds and not in a manner that was arbitrary, irrational or capricious.

Note added 18 November 2015: On 17 November 2015, the TCC gave a short costs judgment in these proceedings, see Portsmouth City Council 'PCC' v Ensign Highways Ltd 'Ensign' [2015] EWHC 3320 (TCC).