Case law summary · Reviewed by Jake Leat, Associate Director · Last reviewed
A commercial contract dispute (not, strictly, an insurance case) that is frequently referenced in commentary on the Insurance Act 2015 because it tests the limits of good-faith dealing, materiality and contractual discretion between sophisticated commercial parties.
Editorial note — [verify citation]: Practitioners sometimes conflate this BAE Systems matter with the so-called “Bridging Loans” line of cases. The leading reported BAE Systems / Bridgehouse decisions are Bridgehouse (Bradford No 2) Ltd v BAE Systems plc [2019] EWHC 1768 (Comm) (Cockerill J), with related/appellate consideration at BAE Systems plc v Bridgehouse (Bradford No 2) Ltd [2020] EWCA Civ 493 and earlier proceedings on related share-sale agreements. The case turns on contractual relief from forfeiture and good faith — it is not itself an Insurance Act 2015 ruling. We include it in this wiki because it is regularly cited in discussion of “honest, fair and reasonable” dealing in modern commercial contracts, including the broader culture in which the IA 2015 must be read.
The dispute arose from share-purchase arrangements between Bridgehouse (Bradford No 2) Ltd (“BB2”), a special purpose vehicle, and BAE Systems plc concerning the disposal and management of certain real-estate and pension liabilities. The contracts contained complex termination triggers, including a clause permitting BAE Systems to terminate if BB2 was struck off the register at Companies House.
BB2 was inadvertently struck off, but subsequently restored to the register under section 1024 of the Companies Act 2006 (which retrospectively restores the company “as if it had not been dissolved”). BAE Systems purported to terminate the agreement in the brief window during which BB2 was dissolved.
BB2 sought relief, arguing that the strike-off was a clerical accident, that restoration was retrospective in effect, and that BAE Systems’ exercise of the termination right was either ineffective, an abuse of contractual discretion, or contrary to a duty of good faith inferred from the parties’ long-term relational contract.
Although not an insurance case, these issues are relevant to insurance practice because the Insurance Act 2015 (and the surviving common-law duty of utmost good faith, as modified by section 14) sits within a wider trend in English commercial law concerning the scope and limits of good-faith reasoning.
At first instance Cockerill J held (paraphrased) that the termination notice was effective when served, and that retrospective restoration under section 1024 did not undo lawful contractual acts taken during the period of dissolution. The judge declined to imply a general good-faith duty into the agreement that would override the express termination right, and did not extend equitable relief from forfeiture to the contractual rights in question.
The Court of Appeal dismissed BB2’s appeal, broadly endorsing the analysis below. The court emphasised the centrality of party autonomy in negotiated commercial agreements and the narrow circumstances in which English law will imply restrictions on the exercise of express rights.
In sophisticated, negotiated commercial contracts, English law is reluctant to imply general good-faith duties that would constrain the exercise of clear express rights, including rights of termination. Retrospective statutory restoration of a struck-off company does not nullify acts validly taken by counterparties during the period of dissolution. Equitable relief from forfeiture is narrowly confined and does not generally extend to commercial contractual rights divorced from proprietary or possessory interests.
While not itself an Insurance Act 2015 case, Bridgehouse v BAE Systems is significant for insurance practice in three respects:
The case is therefore a useful comparator when advising on the practical limits of good-faith arguments under the post-IA 2015 framework.
Author: Matt Bartlett, Director, Apex Insurance Brokers Ltd. Authorised and regulated by the Financial Conduct Authority (FRN 724952). Company registration 07014570 (England & Wales). This article is general information, not legal advice. Last reviewed: June 2026.
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