HELEN COLQUHOUN AND OTHERS AGAINST CLINICAL RESEARCH SOLUTIONS [2022] ScotCS CSOH_96 (30 December 2022)

HELEN COLQUHOUN AND OTHERS AGAINST CLINICAL RESEARCH SOLUTIONS [2022] ScotCS CSOH_96 (30 December 2022)

The obligation to pay the Earn Out Consideration under the SPA became enforceable on the contractual dates specified in paragraphs 1.1.3 and 1.1.5, not upon expert determination. However, relevant acknowledgments by the defenders, including written admissions and part-payments, interrupted and restarted the prescriptive period, preventing extinction of the obligation. The second defender's guarantee liability was not engaged as the primary obligation had not prescribed.

Citation
[2022] ScotCS CSOH_96
Parties
Pursuer: Helen Colquhoun; Pursuer: Edward Elworthy; Pursuer: Iain Colquhoun; Pursuer: Helen Colquhoun as Executor Nominate of the late Sheila Pearson; Defender: Clinical Research Solutions GmbH; Defender: CROMSOURCE SRL
Jurisdiction
Scotland
Judgment Date
30 December 2022
Procedural Posture
Commercial Action / Proof Before Answer
Outcome
Obligation to pay EOC not extinguished by prescription; pursuers entitled to payment.
Legal Topics
Prescription, Share Purchase Agreement, Expert Determination, Guarantee Liability, Earn Out Consideration
Contract Law Commercial Law Prescription Share Purchase Agreement Expert Determination Guarantee Liability Earn Out Consideration

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Parties

Helen Colquhoun

Pursuer

Edward Elworthy

Pursuer

Iain Colquhoun

Pursuer

Helen Colquhoun as Executor Nominate of the late Sheila Pearson

Pursuer

Clinical Research Solutions GmbH

Defender

CROMSOURCE SRL

Defender

Procedural Posture

Commercial Action / Proof Before Answer

Legal Issues

  1. 1 When does the obligation to pay Earn Out Consideration under the SPA become enforceable for prescription purposes?
  2. 2 Does participation in dispute resolution and partial payment constitute relevant acknowledgment under the Prescription and Limitation (Scotland) Act 1973?
  3. 3 Is the second defender liable under the SPA guarantee if the primary obligation has prescribed?

Ratio Decidendi

The obligation to pay the Earn Out Consideration under the SPA became enforceable on the contractual dates specified in paragraphs 1.1.3 and 1.1.5, not upon expert determination. However, relevant acknowledgments by the defenders, including written admissions and part-payments, interrupted and restarted the prescriptive period, preventing extinction of the obligation. The second defender's guarantee liability was not engaged as the primary obligation had not prescribed.

Court Disposition

Obligation to pay EOC not extinguished by prescription; pursuers entitled to payment.

Orders

  • Defenders ordered to pay $475,321 inclusive of interest to pursuers.