Grupo Hotelero Urvasco SA v Carey Value Added SL & Anor [2013] EWHC 1039 (Comm) (26 April 2013)

Grupo Hotelero Urvasco SA v Carey Value Added SL & Anor [2013] EWHC 1039 (Comm) (26 April 2013)

The central issue was whether GHU was in default under the Loan Agreement at the relevant time. The court found that GHU was not in default as alleged by Carey, and therefore Carey was not entitled to withhold further advances. Carey's failure to advance funds constituted a breach of contract. GHU was entitled to...

Source-derived case information.

Citation
[2013] EWHC 1039 (Comm)
Parties
Claimant in Folio 931, Defendant in Folio 1692: Grupo Hotelero Urvasco S.A.; Defendant in Folio 931, Claimant in Folio 1692: Carey Value Added S.L. (formerly Losan Hotels World Value Added I S.L.); Defendant in Folio 931: London Value Added I Limited; Defendant in Folio 1692: Grupo Urvasco S.A.
Jurisdiction
England and Wales
Judgment Date
26 April 2013
Procedural Posture
Commercial Contractual Dispute (loan and Guarantee) / High Court Trial Judgment
Outcome
Judgment for Grupo Hotelero Urvasco S.A. and Grupo Urvasco S.A.; Carey's counterclaim and claim under the guarantee dismissed.
Legal Topics
Loan Agreements, Material Adverse Change Clauses, Guarantees, Damages for Breach of Contract, Set Off, Penalty Clauses, Construction Project Finance
Commercial Law Contract Law Banking and Finance Law Loan Agreements Material Adverse Change Clauses Guarantees Damages for Breach of Contract Set Off +2 more

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Parties

Grupo Hotelero Urvasco S.A.

Claimant in Folio 931, Defendant in Folio 1692

Carey Value Added S.L. (formerly Losan Hotels World Value Added I S.L.)

Defendant in Folio 931, Claimant in Folio 1692

London Value Added I Limited

Defendant in Folio 931

Grupo Urvasco S.A.

Defendant in Folio 1692

Procedural Posture

Commercial Contractual Dispute (loan and Guarantee) / High Court Trial Judgment

Legal Issues

  1. 1 Whether GHU was in default under the Loan Agreement as at 6 June 2008
  2. 2 Whether Carey was entitled to withhold further advances under the Loan Agreement
  3. 3 Whether GHU is relieved from liability to repay under the exculpatory clause in the Share Purchase Agreement

Ratio Decidendi

The central issue was whether GHU was in default under the Loan Agreement at the relevant time. The court found that GHU was not in default as alleged by Carey, and therefore Carey was not entitled to withhold further advances. Carey's failure to advance funds constituted a breach of contract. GHU was entitled to relief from repayment under the exculpatory clause, which was not void as a penalty. Carey's counterclaim for repayment and claim under the guarantee failed. Damages were assessed based on the losses caused by Carey's breach.

Court Disposition

Judgment for Grupo Hotelero Urvasco S.A. and Grupo Urvasco S.A.; Carey's counterclaim and claim under the guarantee dismissed.

Orders

  • Carey to pay damages to GHU as assessed.
  • GHU relieved from liability to repay sums advanced under the Loan Agreement.