Astor Management AG & Anor v Atalaya Mining Plc & Ors

Astor Management AG & Anor v Atalaya Mining Plc & Ors

The Master Agreement expressly made payment of the Deferred Consideration conditional on securing a Senior Debt Facility, and intra-group loans did not qualify. The obligation to use all reasonable endeavours to obtain such a facility was enforceable and continued after 31 December 2010, but Astor failed to prove breach. There was no breach of any implied duty of good faith. However, EMED Tartessus is contractually precluded from making distributions or repaying intra-group loans (except for specified group expenses) and must apply excess cash to pay the Deferred Consideration until it is paid in full.

Parties
Claimant: Astor Management AG; Claimant: Astor Resources AG; Defendant: Atalaya Mining PLC; Defendant: Atalaya Riotinto Minera SL; Defendant: EMED Holdings (UK) Limited; Defendant: EMED Marketing Limited
Jurisdiction
England and Wales
Judgment Date
06 March 2017
Procedural Posture
Commercial Contract Dispute / Judgment After Trial
Outcome
Claim dismissed in part, declarations granted in part
Legal Topics
Enforceability of Reasonable Endeavours Clauses, Interpretation of Contractual Preconditions, Implied Duty of Good Faith, Repayment and Distribution Restrictions, Triggering of Deferred Consideration
Contract Law Commercial Law Enforceability of Reasonable Endeavours Clauses Interpretation of Contractual Preconditions Implied Duty of Good Faith Repayment and Distribution Restrictions Triggering of Deferred Consideration

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Parties

Astor Management AG

Claimant

Astor Resources AG

Claimant

Atalaya Mining PLC

Defendant

Atalaya Riotinto Minera SL

Defendant

EMED Holdings (UK) Limited

Defendant

EMED Marketing Limited

Defendant

Procedural Posture

Commercial Contract Dispute / Judgment After Trial

Legal Issues

  1. 1 Whether securing a Senior Debt Facility was a precondition to payment of Deferred Consideration
  2. 2 Whether intra-group loans constituted a Senior Debt Facility
  3. 3 Whether the obligation to use all reasonable endeavours to obtain a Senior Debt Facility was enforceable and breached

Ratio Decidendi

The Master Agreement expressly made payment of the Deferred Consideration conditional on securing a Senior Debt Facility, and intra-group loans did not qualify. The obligation to use all reasonable endeavours to obtain such a facility was enforceable and continued after 31 December 2010, but Astor failed to prove breach. There was no breach of any implied duty of good faith. However, EMED Tartessus is contractually precluded from making distributions or repaying intra-group loans (except for specified group expenses) and must apply excess cash to pay the Deferred Consideration until it is paid in full.

Court Disposition

Claim dismissed in part, declarations granted in part

Orders

  • Declaration that Deferred Consideration has not become payable as no Senior Debt Facility was secured
  • Declaration that the obligation to use all reasonable endeavours to obtain a Senior Debt Facility is enforceable and continued after 31 December 2010, but no breach established