Minera Las Bambas SA & Anor v Glencore Queensland Ltd & Ors

Minera Las Bambas SA & Anor v Glencore Queensland Ltd & Ors

The court held that 'payable' in the SPA and Deed of Indemnity means an amount that is coercively enforceable under Peruvian law, i.e., only after the Peruvian tax court has finally determined the liability and it becomes enforceable. The NFB VAT and related penalties and interest are not currently 'payable.' The indemnity under the Deed of Indemnity covers the full amount if the third-party claim is adversely determined, regardless of when the liability accrued. The claimants failed to prove a breach of warranty regarding documentation for VAT credits. The reduction in VAT credits or denial of refunds does not constitute 'tax payable' unless it results in an enforceable tax debt.

Parties
Claimant: Minera Las Bambas SA; Claimant: MMG Swiss Finance AG; Defendant: Glencore Queensland Limited; Defendant: Glencore South America Limited; Defendant: Glencore International AG
Jurisdiction
England and Wales
Judgment Date
29 June 2018
Procedural Posture
Commercial Contract Dispute / High Court Judgment After Trial
Outcome
Claimants' claims for immediate payment under the SPA and Deed of Indemnity dismissed; declarations granted regarding scope of indemnity and timing of liability; claim for breach of warranty dismissed.
Legal Topics
Share Purchase Agreement, Tax Indemnity, Contractual Interpretation, Third Party Claims, Breach of Warranty
Contract Law Commercial Law Share Purchase Agreement Tax Indemnity Contractual Interpretation Third Party Claims Breach of Warranty

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 15 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Minera Las Bambas SA

Claimant

MMG Swiss Finance AG

Claimant

Glencore Queensland Limited

Defendant

Glencore South America Limited

Defendant

Glencore International AG

Defendant

Procedural Posture

Commercial Contract Dispute / High Court Judgment After Trial

Legal Issues

  1. 1 Whether NFB VAT assessed by SUNAT is 'payable' under the SPA and Deed of Indemnity
  2. 2 Whether Third Party VAT amounts are 'payable' under the SPA
  3. 3 Interpretation of 'payable' in the SPA and Deed of Indemnity

Ratio Decidendi

The court held that 'payable' in the SPA and Deed of Indemnity means an amount that is coercively enforceable under Peruvian law, i.e., only after the Peruvian tax court has finally determined the liability and it becomes enforceable. The NFB VAT and related penalties and interest are not currently 'payable.' The indemnity under the Deed of Indemnity covers the full amount if the third-party claim is adversely determined, regardless of when the liability accrued. The claimants failed to prove a breach of warranty regarding documentation for VAT credits. The reduction in VAT credits or denial of refunds does not constitute 'tax payable' unless it results in an enforceable tax debt.

Court Disposition

Claimants' claims for immediate payment under the SPA and Deed of Indemnity dismissed; declarations granted regarding scope of indemnity and timing of liability; claim for breach of warranty dismissed.

Orders

  • NFB VAT and related penalties/interest not currently payable under SPA or Deed of Indemnity; only payable if and when Peruvian tax court determines liability and it becomes enforceable.
  • Indemnity under Deed of Indemnity covers full amount if third-party claim is adversely determined, regardless of timing of accrual.