Astra Asset Management UK Ltd v Odin Automotive S.a.r.l.
[2023] EWHC 1465 (Comm)
Musst Holdings Limited v Astra Asset Management UK Limited
13 February 2023
[2023] EWCA Civ 128
Court of Appeal
Two companies argued they didn't owe money to a third company based on a contract. A judge said they did, and a higher court agreed. The higher court said the contract was changed to include the two companies and that they had to pay regardless of changes in investments, because the agreement to pay was made earlier.
Key Facts
- •Musst Holdings Limited (Musst) claimed Astra Asset Management UK Limited and Astra Asset Management LLP (Astra) owed them a share of investment management fees based on a novated contract.
- •The original contract (Octave Contract) was between Musst and two Octave entities.
- •Astra argued the contract wasn't novated, or that any liability ended when investment strategies changed (by 31 December 2014 or 31 December 2015) or a fund was restructured (31 December 2015).
- •The disputed amount was approximately US$3.8m (or US$2.3m if Astra's claim on the fund restructuring succeeded).
Legal Principles
Novation requires consent of all parties, which can be express or implied from conduct. It must provide business efficacy to what happened.
Chitty on Contracts, 34th ed., 22-089ff; Evans v SMG Television Ltd [2003] EWHC 1423 (Ch); MSC Mediterranean Shipping Co SA v Polish Ocean Lines (The “Tychy” (No. 2)) [2001] 2 Lloyd’s Rep 403
Estoppel by convention requires a common assumption shared by the parties, reliance by one party, and unconscionability if the assumption is denied.
Tinkler v HMRC [2021] UKSC 39; Revenue and Customs Commrs v Benchdollar Ltd [2010] 1 All ER 174; Blindley Heath Investments Ltd v Bass [2017] Ch 389
Contractual interpretation focuses on the objective meaning of the language used, considering the contract as a whole, commercial context, and common sense.
Network Rail Infrastructure Ltd v ABC Electrification Ltd [2020] EWCA Civ 1645
Outcomes
Appeal dismissed on all grounds.
The judge's findings on novation (both contractual and by estoppel) were supported by the evidence and context. The judge correctly interpreted the Octave Contract; Astra's liability was not contingent upon the continued adherence to the original investment strategy or the lack of restructuring of ASSCFL.
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