The Court of Appeal today dismissed an appeal against the decision of Mr Justice Blair rejecting a claim for over €5m in damages against the Warburg Pincus private equity group.
The claim arose out of the acquisition of a Bulgarian cable television business by a Warburg Pincus group company. The seller of the business entered into a side letter with the buyer, whereby the parties agreed to negotiate an Investment and Shareholders Agreement that would allow the seller to reinvest €1.65m of the proceeds of sale in exchange for a 10% shareholding in the buyer. In the event, no Investment and Shareholders Agreement was executed, but the seller contended that the side letter gave him an enforceable contractual right to acquire a 10% shareholding in the buyer for €1.65m.
Following a 7-day Commercial Court trial in May 2011, Blair J dismissed the action on three grounds. He held that the parties to the side letter did not intend to create legal relations, that the side letter was merely an agreement to agree, and that it was too uncertain to be enforceable.
Following a one-day hearing on 7 February 2012, the Court of Appeal has now handed down its reasons for dismissing the appeal. While disagreeing with the judge on the question of intention, the Court upheld both of the judge’s other reasons for rejecting the claim.
Conall Patton, instructed by Freshfields Bruckhaus Deringer LLP, acted as sole advocate for the successful Warburg Pincus group defendants, both at the trial and in the Court of Appeal (where the Court did not find it necessary to call on him for oral argument).