Porton Capital Technology Funds & Ors v 3M UK Holdings Ltd & Anor

Porton Capital Technology Funds & Ors v 3M UK Holdings Ltd & Anor

3M was in breach of its obligations under the SPA to diligently seek regulatory approval for BacLite in the US and Canada and to actively market BacLite in the EU, US, Canada, and Australia from specified dates. The vendors’ refusal to consent to the cessation of the business was not unreasonable. The SPA was repudiated by 3M’s cessation of the business, which was accepted by the claimants. The claimants are entitled to damages representing their share of net sales that would have been achieved but for 3M’s breaches.

Parties
Claimant: Porton Capital Technology Funds; Claimant: Porton Capital Inc.; Claimant: Ploughshare Innovations Limited; Defendant: 3M UK Holdings Limited; Defendant: 3M Company
Jurisdiction
England and Wales
Judgment Date
07 November 2011
Procedural Posture
Commercial Dispute / Final Judgment
Outcome
Claim allowed in part; damages awarded to claimants.
Legal Topics
Breach of Contract, Earn Out Clauses, Damages, Withholding of Consent, Inducement of Breach
Contract Law Commercial Law Breach of Contract Earn Out Clauses Damages Withholding of Consent Inducement of Breach

Case Brief

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Parties

Porton Capital Technology Funds

Claimant

Porton Capital Inc.

Claimant

Ploughshare Innovations Limited

Claimant

3M UK Holdings Limited

Defendant

3M Company

Defendant

Procedural Posture

Commercial Dispute / Final Judgment

Legal Issues

  1. 1 Whether 3M was in breach of its contractual obligation to diligently seek regulatory approval for BacLite
  2. 2 Whether 3M was in breach of its contractual obligation to actively market BacLite
  3. 3 Whether the vendors acted unreasonably in withholding consent to terminate the Acolyte business

Ratio Decidendi

3M was in breach of its obligations under the SPA to diligently seek regulatory approval for BacLite in the US and Canada and to actively market BacLite in the EU, US, Canada, and Australia from specified dates. The vendors’ refusal to consent to the cessation of the business was not unreasonable. The SPA was repudiated by 3M’s cessation of the business, which was accepted by the claimants. The claimants are entitled to damages representing their share of net sales that would have been achieved but for 3M’s breaches.

Court Disposition

Claim allowed in part; damages awarded to claimants.

Orders

  • Judgment for the claimants for US$1,299,808 as damages for breach of contract.