The Court of Appeal has held7 that the purchaser of interests in two Ugandan oilfields was entitled to claim against the seller under an English law governed tax indemnity.
The Court considered whether a notice provision in an SPA was a condition precedent to the purchaser’s right to claim. The Court’s decision has reinforced the need to use clear and express language when seeking to limit a contractual claim.
In this particular case, the words “condition precedent” were not used in the relevant sub-clause (requiring written notice to be given to the seller within 20 business days of the purchaser becoming aware of the possible claim). Although alternative words can be used to the same effect, it must be the “clear intention of the parties” to create a condition precedent. On the facts of this case, the fact that other sub-clauses (notably the time limit for bringing a claim) did use such wording meant that, looking at the SPA as a whole, the parties did not intend a breach of the notice requirement to deprive the purchaser of the right to bring a claim.
To view the decision, click here.