The High Court has handed down judgment in Ortiz-Patino v MGI Golf and Leisure Opportunities Fund Limited  EWHC 1203 (Ch). The judgment can be viewed here.
The case concerned a profit-sharing agreement in relation to the world-famous golf course, Valderrama, which hosted the Ryder Cup tournament in 1997. Under the agreement, a profit-share was expressed to be triggered in the event of the sale of real estate assets. However, what was eventually sold was not the real estate assets themselves, but the shares of a holding company which owned the entity which in turn owned the real estate assets. The parties were in dispute over whether the profit-sharing agreement was engaged in the circumstances.
Ashley Greenbank, sitting as a judge of the High Court, held that the profit-sharing agreement was not triggered. The judge gave in-depth consideration to the principles of contractual interpretation as set out by the Supreme Court in Arnold v Britton  UKSC 36. Applying those principles, the judge held that the language of the profit-sharing agreement, as well as the factual circumstances, justified drawing a distinction between an asset sale and a share sale of the holding company.
The case is likely to be of interest to practitioners when drafting and negotiating asset sale or share sale agreements, anti-embarrassment clauses, joint venture or partnership agreements and profit-sharing agreements.
Gary Blaker KC and Oberon Kwok acted for the Claimant and were instructed by Richard Marshall, Oliver Cooke and Manon Huckle of Penningtons Manches Cooper LLP.