Dolphin Capital Partners Limited v DCI Advisors Limited
[2024] EWHC 678 (Comm)
Cindat Nephthys Holding Limited v Hunter Holdings Limited
21 May 2024
[2024] EWHC 1202 (Comm)
High Court
Two big companies had a deal. One company (Cindat) wanted to sell its shares to the other (Oaktree) and said their agreement allowed this. Oaktree said there was a mistake in the agreement and it didn't actually allow the sale. A judge decided Oaktree was wrong. There was no mistake, and Oaktree must now buy the shares.
Key Facts
- •Cindat Nephthys Holding Limited (Cindat) sought summary judgment against Hunter Holdings Limited (Oaktree) for breach of contract under a Shareholders' Agreement.
- •The agreement included a put option allowing Cindat to require Oaktree to buy its shares in 30 South Colonnade Holding Limited (the Company) after four years.
- •Cindat exercised the put option, but Oaktree argued for rectification of the agreement, claiming the put option was conditional on a specific business plan modification.
- •The agreement contained an entire agreement clause.
- •Both parties are large, sophisticated international investment management companies with experienced legal representation.
Legal Principles
Summary judgment should be granted unless the respondent can demonstrate a real prospect of success.
Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and Calland v Financial Conduct Authority [2015] EWCA Civ 192
Summary judgment should not be granted if a defendant's case is not 'bound to be disbelieved' or 'so obviously untrue that it is fanciful to suggest that it might be accepted'.
Director of the Assets Recovery Agency v Woodstock [2006] EWCA Civ 741
To justify disposing of a factual issue at the summary judgment stage, the contemporary material must show the contrary assertion has no real prospect of success.
Optaglio Limited v Tomas Tethal [2015] EWCA Civ 1002
Rectification requires showing the document fails to reflect a prior concluded contract or a common intention mistakenly omitted.
FSHC Group Holdings Ltd v GLAS Trust Corpn Ltd [2020] Ch 365
Rectification requires 'convincing proof' the instrument doesn't represent the parties' common intention.
Britoil Plc v Hunt Overseas Oil Inc [1994] CLC 561
Negotiating history and subjective intent are admissible for rectification but not construction.
Investor Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896
An entire agreement clause doesn't automatically bar rectification; the court must consider its effect on the parties' actual intentions.
Surgicraft Limited v Paradigm Biodevices Inc [2010] EWHC 1291 (Ch)
Outcomes
Summary judgment granted in favour of Cindat.
Oaktree failed to demonstrate a real prospect of success in its rectification claim. The court found the evidence did not support Oaktree's assertion of a common intention different from that reflected in the agreement. The negotiations were between sophisticated parties with experienced legal representation, and the final agreement contained no hint of a mistake.
Oaktree ordered to pay the Put Option Price to Cindat.
A consequence of the summary judgment ruling in favor of Cindat.
Oaktree ordered to take steps to complete the share transfer.
A consequence of the summary judgment ruling in favor of Cindat.