Macquarie Internationale Investments Ltd v Glencore (UK) Ltd [2008] EWHC 1716 (Comm) (21 July 2008)

Macquarie Internationale Investments Ltd v Glencore (UK) Ltd [2008] EWHC 1716 (Comm) (21 July 2008)

Clause 6.8 of the SPA is a valid and enforceable covenant not to sue directors or employees of Corona for claims arising from their conduct as directors, including negligence, and is enforceable by the Additional Defendants under the Contracts (Rights of Third Parties) Act 1999. The clause is not limited to claims in a directorial capacity or to non-negligent conduct, and its commercial purpose is to prevent circular claims and protect the value of the warranties and the company. The clause does not fail for unreasonableness under the Unfair Contract Terms Act 1977 at this stage.

Citation
[2008] EWHC 1716 (Comm)
Parties
Claimant: Macquarie Internationale Investments Ltd; Defendant and Part 20 Claimant: Glencore (UK) Ltd; Part 20 Defendant: John Spellman; Part 20 Defendant: Gary Russell
Jurisdiction
England and Wales
Judgment Date
21 July 2008
Procedural Posture
Commercial Court Claim With Part 20 Proceedings / Application for Summary Judgment And/or Strike Out of Part 20 Claims
Outcome
Summary judgment granted for the Additional Defendants; Part 20 claims dismissed.
Legal Topics
Exclusion Clauses, Directors' Duties, Share Sale Agreements, Third Party Rights, Summary Judgment, Unfair Contract Terms Act 1977
Contract Law Company Law Commercial Law Exclusion Clauses Directors' Duties Share Sale Agreements Third Party Rights Summary Judgment +1 more

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Parties

Macquarie Internationale Investments Ltd

Claimant

Glencore (UK) Ltd

Defendant and Part 20 Claimant

John Spellman

Part 20 Defendant

Gary Russell

Part 20 Defendant

Procedural Posture

Commercial Court Claim With Part 20 Proceedings / Application for Summary Judgment And/or Strike Out of Part 20 Claims

Legal Issues

  1. 1 Whether clause 6.8 of the SPA bars Glencore from bringing claims against directors for alleged breaches of duty
  2. 2 Whether clause 6.8 covers claims for negligence or only directorial capacity
  3. 3 Whether clause 6.8 is unenforceable under the Unfair Contract Terms Act 1977

Ratio Decidendi

Clause 6.8 of the SPA is a valid and enforceable covenant not to sue directors or employees of Corona for claims arising from their conduct as directors, including negligence, and is enforceable by the Additional Defendants under the Contracts (Rights of Third Parties) Act 1999. The clause is not limited to claims in a directorial capacity or to non-negligent conduct, and its commercial purpose is to prevent circular claims and protect the value of the warranties and the company. The clause does not fail for unreasonableness under the Unfair Contract Terms Act 1977 at this stage.

Court Disposition

Summary judgment granted for the Additional Defendants; Part 20 claims dismissed.

Orders

  • The Part 20 claims brought by Glencore against Mr Spellman and Mr Russell are dismissed.
  • No order as to costs at this stage.