Minera Las Bambas SA & Anor v Glencore Queensland Ltd & Ors

Minera Las Bambas SA & Anor v Glencore Queensland Ltd & Ors

Tax is 'payable' under the SPA indemnity only when an enforceable obligation arises after exhaustion of appeals, not upon mere assessment; disallowance of VAT credits not refunded is not 'Tax payable'; 'Indemnified VAT Receivable' requires inclusion in the Completion Statement and actual loss, not prior refund; no breach of warranty was established as documents were available or accessible; clause 11.8.2 applies a factual 'but for' test and bars indemnity for losses that would not have occurred but for acts or omissions of the Purchasers, including failure to obtain a higher discount under Peruvian law.

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
Civil Appeal / Court of Appeal Judgment on Cross Appeals From High Court
Outcome
Appeals dismissed except as to scope of clause 10.1.2 and reservation of clause 11.8.2 defence.
Legal Topics
Contractual Interpretation, Indemnity Clauses, Tax Warranties, Limitation of Liability, Mitigation of Loss
Commercial Law Contract Law Contractual Interpretation Indemnity Clauses Tax Warranties Limitation of Liability Mitigation of Loss

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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

Civil Appeal / Court of Appeal Judgment on Cross Appeals From High Court

Legal Issues

  1. 1 When does tax become 'payable' under the SPA indemnity?
  2. 2 Does disallowance of VAT credits constitute 'Tax payable'?
  3. 3 What constitutes an 'Indemnified VAT Receivable'?

Ratio Decidendi

Tax is 'payable' under the SPA indemnity only when an enforceable obligation arises after exhaustion of appeals, not upon mere assessment; disallowance of VAT credits not refunded is not 'Tax payable'; 'Indemnified VAT Receivable' requires inclusion in the Completion Statement and actual loss, not prior refund; no breach of warranty was established as documents were available or accessible; clause 11.8.2 applies a factual 'but for' test and bars indemnity for losses that would not have occurred but for acts or omissions of the Purchasers, including failure to obtain a higher discount under Peruvian law.

Court Disposition

Appeals dismissed except as to scope of clause 10.1.2 and reservation of clause 11.8.2 defence.

Orders

  • Unduly refunded VAT is not within scope of clause 10.1.2 of the SPA.
  • Paragraph 6 of the High Court order varied to allow Sellers to assert clause 11.8.2 defence if relevant liabilities become payable.