Uitspraak Nº NCC 20/014 (C/13/681900). Rechtbank Amsterdam, 2020-04-29
| ECLI | ECLI:NL:RBAMS:2020:2406 |
| Docket Number | NCC 20/014 (C/13/681900) |
| Date | 29 Abril 2020 |
| Court | Rechtbank Amsterdam (Neederland) |
Netherlands Commercial Court
NCC District Court – Court in Summary Proceedings Case reference number: NCC 20/014 (C/13/681900) Judgment
29 April 2020
Claimant
[CLAIMANT]
“[Claimant]”
New York, New York, USA
lawyers: A.F.J.A. Leijten, O.J.W. Schotel and M.F. van Schendel, Amsterdam v.
Defendant
TENNOR HOLDING B.V.
“Tennor”
Amsterdam
lawyers: S.C.M. van Thiel, R.E.E. van Dekken and C.L. Kruse, Amsterdam
Contents
-
Summary
-
Procedural history
-
Discussion
-
Conclusion and order Signature pages
Reference is made to the Court’s judgment on Tennor’s motion (published on the Judgments List, ncc.gov.nl: ECLI:NL:RBAMS:2020:2277). That judgment set out the initial procedural history, background facts and [Claimant]’s main and alternative claims.
[Claimant]’s main claim seeks to compel the transfer of [Claimant]’s 50% stake in an equestrian show-jumping business to Tennor. In the Court’s analysis, that is a bridge too far. There is not enough solid ground in the record,1 at this early stage and on a preliminary basis, to accept [Claimant]’s argument that the deal was done. In particular, there is nothing to show that Tennor itself said or did anything that a reasonable person in the same circumstances would have understood to mean that certain advisers were responsible for conveying final approval to [Claimant]. By contrast, [Claimant]’s alternative claim seeks payment of the expressly agreed fee due by Tennor as the party electing not to do the deal. Tennor contends that the fee should be modified or reduced given the current COVID-19 circumstances. The Court is not persuaded. In the Court’s opinion at this early stage and on
a preliminary basis, the best course is to rely on the parties’ judgement. They are experienced professionals, well guided and ably counselled by an array of experts. They set the fee and expressed their considered view that it was reasonable. They set their contractual equilibrium. The payment of the fee will preserve that equilibrium. Accordingly, the alternative claim is allowed, with interest.
All submissions were made in eNCC, by special order of the Court, given the current COVID-19 restrictions. Following the Judgment on the Motion, Tennor filed a statement of defence. Both parties submitted exhibits. Counsel submitted notes in eNCC in advance of the hearing. [Claimant] amended its claim. The matter was dealt with at a public videoconference hearing on 22 April 2020. The case was set for judgment today.
The core facts in the case are straightforward and uncontested. It is worth reciting the main points here. They are:
[Claimant] and Tennor spent months in talks on a proposed transaction for Tennor to acquire [Claimant]’s 50% stake in an equestrian show-jumping business.2 They signed a Letter of Intent (LOI) in late December 2019. The LOI provides that either party may elect to back out of the deal at any time before the deadline, but the electing party must pay the non-electing party a EUR 30 million “fee”. The deadline was 2 March 2020 (Tennor paying a EUR 1 million fee for a two-week extension to that date). [Claimant] executed the paperwork for the deal. Tennor’s lawyers and other advisers made various statements on the deal (such as: “the drafts are final” and “Will revert with the signature pages in a few minutes”).
Tennor’s authorised officer did not sign the paperwork.
To set the stage for the analysis, it is useful to reiterate the parties’ positions.
[Claimant] seeks an order for Tennor to take the stake and pay the price (EUR 169 million) (the main claim) or, in the alternative, an order for Tennor to pay the EUR 30 million fee (the alternative claim).
Tennor’s defence has three prongs:
a. First, Tennor argues that there is no deal as its officer did not sign.
b. Next, Tennor relies on Articles 6:248, 6:258 and 6:260 of the DCC3 and contends that any deal must be dissolved, or its effects must be modified, in light of the current COVID-19 circumstances and their impact on the business.
c. Last, Tennor insists, on similar grounds plus Article 6:94 of the DCC,4 that the fee should be dissolved, modified or reduced to zero.
In response, in addition to its argument that the deal was done, [Claimant] contends that the business has retained its long-term value and that Tennor’s change-of- circumstances arguments5 would effectively shift the COVID-19 burden entirely onto [Claimant]’s shoulders. Accordingly, [Claimant] argues there are no grounds to apply Articles 248, 258, 260 or 94 in these circumstances.
Preliminary matters
At the outset, the Court must determine the appropriate standard and the applicable law, and dispose of two preliminary matters.
The standard in summary proceedings has three prongs:6
a. Is there a sufficient likelihood of success on the merits?7
b. Is an immediate measure urgent and required in summary proceedings?
c. Is there a risk, on a balance of interests, of the unsuccessful party not being able to recover the funds, or undo the measure, if it is ultimately successful on the merits?
The courts must consider whether or not, on a balance of interests, the claimant’s interests have enough weight to allow the claims. The courts should exercise caution in light of the recovery risk ((c) above). The likelihood of success on the merits ((a) above) is an important factor in the assessment of the recovery risk ((c) above). As for claims for money in summary proceedings, such as the alternative claim, the courts’ judgment must provide more detailed reasoning to explain why the measure is or is not urgent. The courts’ assessment in summary proceedings is at an early stage and on a preliminary basis; this means it is without prejudice to a subsequent action on the merits.
Next, the Court notes there is no dispute that Dutch law governs the parties’ relationships at issue in the matter.
The first preliminary issue is whether [Claimant] has a sufficiently urgent interest so as to justify the Court’s examination of its main claim in summary proceedings. The Court is persuaded that [Claimant] has the required interest. The context and purpose of the claim make this obvious: what is at stake is who will run the business pending dispute resolution on the merits. That in itself is sufficient. The parties need to know what their position is, and they need to know soon. But even the issue of the fee – the alternative claim – is sufficient to accept the requisite interest in this case. The mechanism of the LOI creates a clear and unambiguous rule: either you do the deal, or you pay the fee and walk away. And if you walk away, you pay the fee fast – within three business days. This means virtually immediately. The immediate payment concept is an essential part of the incentives the parties created with a view to comfort and confidence in each other’s intentions to do the deal. And comfort and confidence were at the heart of the bargain in the LOI.8 If summary proceedings are not available to enforce the heart of the bargain, the bargain itself is an empty shell. As a result, speed is essential and [Claimant] has an urgent interest that justifies bringing its claim for money in summary proceedings.
The other preliminary issue is whether it is appropriate to deal with the matter in summary proceedings. The Court notes that the material facts are fundamentally clear and not in dispute. The legal issues present novel theories, but are not complicated. The issues are: Did the parties do the deal, and are there any compelling reasons to modify or mitigate the resulting obligations? Whether or not everything is clear enough at this stage to adjudicate the dispute in summary
proceedings is an issue to be addressed in the Court’s analysis of the claims. This does not warrant the denial of all claims as a preliminary matter.
Whether the deal was done (the main claim)
The Court now turns to [Claimant]’s main claim. It is based on the position that the parties made a deal – an enforceable contract. The issue as to the main claim is whether or not the deal was done.
There is no doubt that general principles of contract formation apply here. Dutch law requires an offer and an acceptance of the offer for contract formation, and allows the parties broad leeway as to how they communicate what may or may not be construed as an offer or acceptance. The standard is not what the parties may have thought, or meant to say. It is what a reasonable person in the same circumstances would have understood their communications to mean.9
Applying these rules, the Court emphasises who the parties are and how they operate. The parties are experienced M&A specialist practitioners, guided by expert financial, legal and other advisers. Both sides have groups of companies operating in various jurisdictions.
In this context, at this early stage and on a preliminary basis, it is the Court’s view that an authorised officer’s signature has special significance and weight. It is not just a formality. It may not be the only way, but for these parties, as to this transaction and in these circumstances, it is universally acknowledged and accepted as the ordinary way to express final, binding agreement and to enter into the deal. A significant reason for this conclusion is Tennor’s uncontested argument that its organisation has various people who are responsible for decision-making in different ways and at different steps in the process. For example, Tennor had numerous advisers, and it presented the deal to its board. There is no single person who has complete authority or responsibility. Tennor’s structure and process...
Om verder te lezen
PROBEER HET UIT