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British South Africa Company v De Beers Consolidated Mines Ltd
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British South Africa Company v De Beers Consolidated Mines Ltd [1910] 2 Ch 502 is a judicial decision of the English Court of Appeal relating to the conflict of laws, and clogs upon the equity of redemption.[1][2][3][4]
British South Africa Company v De Beers Consolidated Mines Ltd | |
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![]() Arms of the British South Africa Company | |
Court | Court of Appeal |
Citations | [1910] 2 Ch 502 [1910] LJ Ch 65 (1910) 103 LT 4 (1910) 26 TLR 591 |
Case history | |
Appealed from | [1910] 1 Ch 354 |
Appealed to | [1912] AC 52 [1911] 12 WLUK 10 HL |
Court membership | |
Judges sitting | Lord Cozens-Hardy MR Farwell LJ Kennedy LJ |
Keywords | |
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The British South Africa Company (BSAC) entered into an agreement with De Beers under which De Beers loaned various sums of money to BSAC, and BSAC granted security over all its assets in the form of a floating charge as collateral for the loans. That agreement also contained a provision which granted De Beers the exclusive right to mine diamonds south of the Zambezi river in perpetuity.
BSAC brought proceedings against De Beers in the English courts arguing that the provision for the exclusive mining of diamonds was unenforceable for various different reasons. The English Court of Appeal held that the provision was invalid because it constituted "a clog" on the equity of redemption, and that notwithstanding the property was located in a country that did not recognise the concept of an equity of redemption, the English courts would nevertheless apply the doctrine on the basis that the agreement was governed by English law and it could make an order on the parties in personam.
The decision was reversed on other grounds by the House of Lords,[5] but the Court of Appeal decision remains a leading authority in relation to clogs on the equity of redemption and the conflict of laws.