Ageas (UK) Ltd v Kwik-Fit (GB) Ltd & Anor

Ageas (UK) Ltd v Kwik-Fit (GB) Ltd & Anor

Damages for breach of warranty in the share purchase agreement should be assessed at the date of breach, based on reasonable assumptions available at that time, without reference to subsequent events, because the contractual allocation of risk places post-acquisition trading results with the buyer and there is no windfall or injustice in following the conventional approach.

Parties
Claimant: Ageas (UK) Limited; First Defendant: Kwik-Fit (GB) Limited; Second Defendant: AIG Europe Limited
Jurisdiction
England and Wales
Judgment Date
04 July 2014
Procedural Posture
Commercial / Judgment
Outcome
Claim allowed
Legal Topics
Share Purchase Agreement, Warranty Breach, Damages Assessment, Valuation Methodology, Allocation of Risk
Contract Law Insurance Law Commercial Law Share Purchase Agreement Warranty Breach Damages Assessment Valuation Methodology Allocation of Risk

Case Brief

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Parties

Ageas (UK) Limited

Claimant

Kwik-Fit (GB) Limited

First Defendant

AIG Europe Limited

Second Defendant

Procedural Posture

Commercial / Judgment

Legal Issues

  1. 1 Whether damages for breach of warranty in a share purchase agreement should be assessed using hindsight and subsequent events or only information available at the date of breach
  2. 2 Whether the contractual allocation of risk precludes the use of subsequent events in damages assessment
  3. 3 Whether the compensatory principle requires adjustment for post-acquisition trading results

Ratio Decidendi

Damages for breach of warranty in the share purchase agreement should be assessed at the date of breach, based on reasonable assumptions available at that time, without reference to subsequent events, because the contractual allocation of risk places post-acquisition trading results with the buyer and there is no windfall or injustice in following the conventional approach.

Court Disposition

Claim allowed

Orders

  • AIG to pay Ageas the principal sum of £12,635,000; final judgment amount subject to further argument on tax treatment and interest.