Minera Las Bambas SA & Anor v Glencore Queensland Ltd & Ors [2019] EWCA Civ 972 (14 June 2019)

Minera Las Bambas SA & Anor v Glencore Queensland Ltd & Ors [2019] EWCA Civ 972 (14 June 2019)

Tax is 'payable' under SPA and Deed of Indemnity only when enforceable under Peruvian law after appeals; rejected VAT credits not refunded do not constitute 'Tax payable'; 'Indemnified VAT Receivable' requires inclusion in Completion Statement and not already refunded; no breach of warranty found as documentation was available or accessible; clause 11.8.2 limits Sellers' liability for losses caused by Purchasers' acts or omissions, including failure to obtain maximum penalty discount; factual causation applies, not legal causation.

Citation
[2019] EWCA Civ 972
Parties
Claimant/appellant/respondent: Minera Las Bambas S.A.; Claimant/appellant/respondent: MMG Swiss Finance AG; Defendant/respondent/appellant: Glencore Queensland Limited; Defendant/respondent/appellant: Glencore South America Limited; Defendant/respondent/appellant: Glencore International AG
Jurisdiction
England and Wales
Judgment Date
14 June 2019
Procedural Posture
Commercial Contract Dispute (appeal) / Court of Appeal Judgment
Outcome
Appeals dismissed; judge's interpretation largely upheld; issue of clause 11.8.2 defence remains undecided pending outcome of Peruvian tax court appeal.
Legal Topics
Contractual Interpretation, Tax Indemnity, Warranty Breach, Limitation of Liability, Mitigation of Losses
Commercial Law Contract Law Tax Law Contractual Interpretation Tax Indemnity Warranty Breach Limitation of Liability Mitigation of Losses

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Parties

Minera Las Bambas S.A.

Claimant/appellant/respondent

MMG Swiss Finance AG

Claimant/appellant/respondent

Glencore Queensland Limited

Defendant/respondent/appellant

Glencore South America Limited

Defendant/respondent/appellant

Glencore International AG

Defendant/respondent/appellant

Procedural Posture

Commercial Contract Dispute (appeal) / Court of Appeal Judgment

Legal Issues

  1. 1 When does tax become 'payable' under SPA and Deed of Indemnity?
  2. 2 Does rejection of VAT credits constitute 'Tax payable'?
  3. 3 What constitutes an 'Indemnified VAT Receivable'?

Ratio Decidendi

Tax is 'payable' under SPA and Deed of Indemnity only when enforceable under Peruvian law after appeals; rejected VAT credits not refunded do not constitute 'Tax payable'; 'Indemnified VAT Receivable' requires inclusion in Completion Statement and not already refunded; no breach of warranty found as documentation was available or accessible; clause 11.8.2 limits Sellers' liability for losses caused by Purchasers' acts or omissions, including failure to obtain maximum penalty discount; factual causation applies, not legal causation.

Court Disposition

Appeals dismissed; judge's interpretation largely upheld; issue of clause 11.8.2 defence remains undecided pending outcome of Peruvian tax court appeal.

Orders

  • No indemnity currently payable for New Town VAT or unduly refunded VAT credits unless Peruvian tax court upholds liability and debt becomes enforceable.
  • No indemnity for rejected VAT credits not refunded unless breach of warranty established.