Atheer Telecom Iraq Ltd v Orascom Telecom Iraq Corp. Ltd & Anor

Atheer Telecom Iraq Ltd v Orascom Telecom Iraq Corp. Ltd & Anor

The tax liabilities assessed by the Iraqi authorities arose as a result of events on or before Closing and are covered by the Tax Covenant. The contractual exceptions do not exclude liability, as cessation of trade or dishonesty did not cause the liability. Notice and proceedings were timely under the SPA. Payment is required under the SPA when liability to interest or penalties accrues, regardless of whether payment is being pressed by the authorities.

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 Claim / Judgment After Trial
Outcome
Claimant succeeds
Legal Topics
Tax Indemnity, Share Purchase Agreement, Contractual Interpretation, Time Bar, Dishonesty Exceptions
Commercial Law Contract Law Tax Law Tax Indemnity Share Purchase Agreement Contractual Interpretation Time Bar Dishonesty Exceptions

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 Claim / Judgment After Trial

Legal Issues

  1. 1 Whether tax liabilities claimed by Iraqi authorities fall within the Tax Covenant of the SPA
  2. 2 Whether contractual exceptions exclude liability
  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 on or before Closing and are covered by the Tax Covenant. The contractual exceptions do not exclude liability, as cessation of trade or dishonesty did not cause the liability. Notice and proceedings were timely under the SPA. Payment is required under the SPA when liability to interest or penalties accrues, regardless of whether payment is being pressed by the authorities.

Court Disposition

Claimant succeeds

Orders

  • Appropriate terms of an Order to reflect judgment to be considered