Key Facts
- •Claimants sold the entire issued share capital in Finance Bank Zambia ('FBZ') to the Defendants via a Share and Sale Purchase Agreement (SPA) dated November 2, 2015 (as amended).
- •The SPA included provisions for an earn-out, contingent consideration (escrow shares), and a special provision for the sale of a subsidiary, Finance Building Society ('FBS').
- •Disputes arose regarding the appointment of a Fund Raising Agent, the sale of FBS, and the release of escrow shares.
- •Key witnesses included Dr. Mahtani (Claimant), Ms. Hamza Bassey (Defendant), and Dr. Ng'andu (expert witness on Zambian regulatory law).
Legal Principles
Construction of contracts: The court interprets contracts based on their wording, context, and the parties' intentions.
Various contract law cases cited in the judgment
Implied terms: Terms can be implied into a contract if they are necessary to give effect to the parties' intentions.
Various contract law cases cited in the judgment
Unreasonable withholding of consent: A party cannot unreasonably withhold consent to a matter governed by a contract.
International Drilling Fluids v Louisville Investments [1986] Ch 513; Ashworth Frazer Ltd v Gloucester CC [2001] 1 WLR 2180; Porton Capital Technology Funds v 3M UK Holdings Limited [2011] EWHC 2895 (Comm)
Conflict of interest: A party cannot act in a way that creates a conflict of interest.
General principles of contract law and agency
Causation: A breach of contract must cause the claimant's loss to be recoverable.
General principles of contract law
Loss of a chance: Damages can be awarded for loss of a chance if there was a real and substantial chance of success.
PCP Capital Partners LLP v Barclays Bank Plc [2021] EWHC 307 (Comm)
Zambian Banking and Financial Services Act 1994: Regulates acquisitions of shares in Zambian financial institutions.
Section 23 of the Zambian Banking and Financial Services Act 1994
Outcomes
Fund Raising Agent Claim dismissed.
The court found that the Defendants acted reasonably in rejecting the nominated Fund Raising Agent due to a perceived conflict of interest. Further, the Claimants failed to prove that the Defendants' actions caused any loss.
Building Society Claim dismissed.
The court held that the SPA did not entitle Dr. Mahtani to purchase FBS for a nominal price without following the prescribed procedure. Further, Dr. Mahtani failed to fulfil necessary conditions, including providing a draft FBS SPA and obtaining regulatory approval.
Escrow Shares Claim dismissed.
The court found that the Defendants had no unilateral obligation to release escrow shares and that the Claimants failed to prove a breach of contract or loss.