OneCom Group Limited v James Palmer
[2024] EWHC 867 (Comm)
Drax Smart Generation Holdco Limited v Scottish Power Retail Holdings Limited
8 May 2024
[2024] EWCA Civ 477
Court of Appeal
A buyer sued a seller after a deal went wrong. The contract said the buyer had to give quick notice of any problems. The buyer's notice wasn't perfect, but the court said it was good enough because it gave the seller enough information to know what was happening. The court decided that the buyer's claim was still valid.
Key Facts
- •Drax purchased shares in a company from Scottish Power.
- •The share purchase agreement included warranties and an indemnity clause.
- •A dispute arose concerning the transfer of an option agreement for an easement.
- •Drax issued a notice of claim, which Scottish Power argued was insufficient.
- •Drax's claim was based on breach of warranty, breach of contract, and indemnity.
- •The notice of claim clause had different deadlines for different types of claims.
- •Deeds of variation modified the notice of claim deadlines.
- •Drax subsequently sought to amend its particulars of claim.
- •The case involved interpreting the sufficiency of the notice of claim and the applicability of different time limits.
Legal Principles
Notice of claim clauses in share purchase agreements should be interpreted in light of their commercial purpose, promoting finality and certainty but not creating technical traps to defeat valid claims.
Dodika Ltd v United Luck Group Holdings Ltd [2021] EWCA Civ 638 and Nobahar-Cookson v The Hut Group Ltd [2016] EWCA Civ 128
Exclusion clauses should be narrowly construed if necessary to resolve ambiguity; parties are not lightly taken to have intended to cut down legal remedies without clear words.
Nobahar-Cookson v The Hut Group Ltd [2016] EWCA Civ 128
The 'nature of the claim' and 'amount claimed' in a notice of claim must be stated in reasonable detail, but the level of detail required is informed by the commercial purpose of the clause.
Schedule 4, paragraph 2.1 of the Share Purchase Agreement
Outcomes
Drax's appeal allowed; its claims for damages were not barred by the notice of claim clause.
The notice of claim provided sufficient detail of the nature of the claim and the amount claimed, even if it didn't explicitly state the claim was based on difference in value. The court emphasized the commercial purpose of the clause and avoided a technical interpretation that would defeat a valid claim.
Scottish Power's appeal dismissed; Drax's claim for indemnity under clause 11.1 was not barred.
The applicable time limit for the indemnity claim was seven years, not the shorter period for Damhead Creek II Option Agreement Claims. The court found that the deeds of variation were not intended to shorten the existing seven-year period for Reorganisation Indemnity Claims.