ING Bank NV v Ros Roca SA (Rev 1)

ING Bank NV v Ros Roca SA (Rev 1)

The Court of Appeal held that, on the proper construction of the contract, the fee should be calculated using EBITDA 2006 as specified. However, ING was estopped by convention (and/or promissory estoppel) from relying on that construction because both parties proceeded on a shared assumption that the fee would be calculated using the current EBITDA (2007), and it would be unconscionable to allow ING to resile from that position after the transaction was completed.

Parties
Appellant: ING Bank NV; Respondent: Ros Roca SA
Jurisdiction
England and Wales
Judgment Date
31 March 2011
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal and cross-appeal both allowed; result is that Ros Roca's position at trial is upheld but on the basis of estoppel, not construction.
Legal Topics
Contract Interpretation, Estoppel by Convention, Promissory Estoppel, Commercial Agreements, Fee Calculation Clauses
Contract Law Commercial Law Equity Contract Interpretation Estoppel by Convention Promissory Estoppel Commercial Agreements Fee Calculation Clauses

Case Brief

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Parties

ING Bank NV

Appellant

Ros Roca SA

Respondent

Procedural Posture

Civil Appeal / Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Proper construction of a fee calculation clause in a financial advisory contract
  2. 2 Whether estoppel by convention or promissory estoppel precludes reliance on the contractual construction

Ratio Decidendi

The Court of Appeal held that, on the proper construction of the contract, the fee should be calculated using EBITDA 2006 as specified. However, ING was estopped by convention (and/or promissory estoppel) from relying on that construction because both parties proceeded on a shared assumption that the fee would be calculated using the current EBITDA (2007), and it would be unconscionable to allow ING to resile from that position after the transaction was completed.

Court Disposition

Appeal and cross-appeal both allowed; result is that Ros Roca's position at trial is upheld but on the basis of estoppel, not construction.

Orders

  • ING Bank NV is estopped from claiming a fee based on EBITDA 2006 and is confined to a fee calculated using EBITDA 2007.
  • Ros Roca SA is not liable to pay the higher fee claimed by ING Bank NV.