Archer v Nubuke Investments LLP & Ors

Archer v Nubuke Investments LLP & Ors

No implied term requiring the LLP or its members to permit due diligence access to potential third-party purchasers is to be read into the LLP Agreement. The express duty of utmost good faith does not extend to facilitating such due diligence. No compliant third-party offer was made, and the valuation process was valid. Even if there had been a breach, there was no real or substantial chance that a third party would have made a compliant offer. The counterclaim for repayment of drawings fails as repayment was only out of future profits, which did not arise.

Parties
Claimant: Ian Archer; First Defendant: Nubuke Investments LLP; Second Defendant: Kofi Tutu Agyare; Third Defendant: Peter Kwesi Enti
Jurisdiction
England and Wales
Judgment Date
23 October 2014
Procedural Posture
Civil (partnership/llp Dispute) / Judgment After Trial
Outcome
Claim and counterclaim dismissed
Legal Topics
Implied Terms, Good Faith, Valuation of Partnership Interest, Expulsion of Member, Due Diligence, Breach of Contract
Commercial Law Partnership Law Implied Terms Good Faith Valuation of Partnership Interest Expulsion of Member Due Diligence Breach of Contract

Case Brief

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Parties

Ian Archer

Claimant

Nubuke Investments LLP

First Defendant

Kofi Tutu Agyare

Second Defendant

Peter Kwesi Enti

Third Defendant

Procedural Posture

Civil (partnership/llp Dispute) / Judgment After Trial

Legal Issues

  1. 1 Whether the LLP and its members were obliged to provide due diligence access to potential third-party purchasers under the LLP Agreement or implied terms
  2. 2 Whether the LLP and its members breached an express or implied duty of utmost good faith in relation to the sale of a member's interest
  3. 3 Whether the LLP's actions invalidated the valuation process for the claimant's interest

Ratio Decidendi

No implied term requiring the LLP or its members to permit due diligence access to potential third-party purchasers is to be read into the LLP Agreement. The express duty of utmost good faith does not extend to facilitating such due diligence. No compliant third-party offer was made, and the valuation process was valid. Even if there had been a breach, there was no real or substantial chance that a third party would have made a compliant offer. The counterclaim for repayment of drawings fails as repayment was only out of future profits, which did not arise.

Court Disposition

Claim and counterclaim dismissed

Orders

  • The claims against all Defendants are dismissed.
  • The counterclaim is dismissed.