The High Court has considered two differently worded introduction agreements between a casino company and a consultant who had been appointed to find new projects for the casino company. The consultant's appointment was governed by the following two agreements:
- An agreement entered into in November 2005, under which the consultant was entitled to 4% of the casino company's equity in each UK project "introduced by you".
- A second agreement entered into in June 2008, which sought to extend and expand the scope of the earlier agreement, under which the consultant had a right to 4% of the casino company's equity in any new business acquired or operated by the casino company pursuant to the consultant's initiatives.
The casino company established a UK based company to operate a casino in Glasgow and subsequently established a joint venture in Italy. The consultant claimed a 4% share in the casino company's holdings in both the UK based company and the Italian joint venture. Crucially, the casino company's involvement in both the UK and Italian ventures resulted largely from the efforts of individuals that had been introduced by the consultant to the casino company, rather than the efforts of the consultant himself.
The High Court held that, under the 2005 agreement, the consultant was not entitled to a share in the UK based company as the term "introduce" in that agreement should be read as requiring the consultant, not a third party, to be the effective cause of the introduction to the project. The consultant had introduced a person to the casino company, not the project itself. Under the 2008 agreement, the High Court held that the consultant was entitled to a share in the Italian joint venture as the Court considered the phrase "pursuant to your initiatives" should be interpreted differently to the term "introduce". The Court considered that there could be a number of different "initiatives" required to bring a project to fruition, not just a simple introduction.
This case highlights the importance of ensuring that the terms on which an introducer is engaged are clearly set out. To avoid subsequent confusion, parties to such an arrangement should agree the terms on which an introducer is to be remunerated. A company paying an introducer may wish to rely on the limited meaning of the term "introduce", but an introducer would be well advised to agree precisely the events that would trigger payment of their commission.
Case: Wollenberg v Casinos Austria International Holding GmbH  EWHC 103