Atheer Telecom Iraq Ltd v Orascom Telecom Iraq Corp. Ltd & Anor [2017] EWHC 279 (Comm) (17 February 2017)

Atheer Telecom Iraq Ltd v Orascom Telecom Iraq Corp. Ltd & Anor [2017] EWHC 279 (Comm) (17 February 2017)

The tax liabilities assessed by the Iraqi authorities arose as a result of events or income before Closing and are covered by the Tax Covenant in the SPA. The exceptions relied on by the defendants, including cessation of trade and dishonesty, do not apply on the facts. The claim was brought within the contractual time limits. The assessments, even if out of time or irregular in form, remain valid unless and until successfully objected to under Iraqi law. Accordingly, the claimant is entitled to relief under the Tax Covenant.

Citation
[2017] EWHC 279 (Comm)
Parties
Claimant: Atheer Telecom Iraq Limited; First Defendant: Orascom Telecom Iraq Corp. Limited; Second Defendant: Global Telecom Holding S. A. E. (formerly Orascom Telecom Holding S. A. E.)
Jurisdiction
England and Wales
Judgment Date
17 February 2017
Procedural Posture
Commercial Court Claim / Judgment After Trial
Outcome
Claimant succeeds
Legal Topics
Tax Indemnity, Share Purchase Agreement, Tax Liability, Time Bar, Dishonesty, Interpretation of Contractual Terms
Contract Law Commercial Law Tax Indemnity Share Purchase Agreement Tax Liability Time Bar Dishonesty Interpretation of Contractual Terms

Case Brief

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Parties

Atheer Telecom Iraq Limited

Claimant

Orascom Telecom Iraq Corp. Limited

First Defendant

Global Telecom Holding S. A. E. (formerly Orascom Telecom Holding S. A. E.)

Second Defendant

Procedural Posture

Commercial Court Claim / Judgment After Trial

Legal Issues

  1. 1 Whether the tax liabilities assessed by Iraqi authorities fall within the Tax Covenant of the SPA
  2. 2 Whether exceptions to the Tax Covenant apply, including cessation of trade and dishonesty
  3. 3 Whether the claim is time-barred under the SPA

Ratio Decidendi

The tax liabilities assessed by the Iraqi authorities arose as a result of events or income before Closing and are covered by the Tax Covenant in the SPA. The exceptions relied on by the defendants, including cessation of trade and dishonesty, do not apply on the facts. The claim was brought within the contractual time limits. The assessments, even if out of time or irregular in form, remain valid unless and until successfully objected to under Iraqi law. Accordingly, the claimant is entitled to relief under the Tax Covenant.

Court Disposition

Claimant succeeds

Orders

  • Claimant entitled to relief under the Tax Covenant; terms of the order to be determined following judgment