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Lloyd's Law Reporter

MACQUARIE INTERNATIONALE INVESTMENTS LTD V GLENCORE (UK) LTD

[2008] EWHC 1716 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Walker, 21 July 2008

Sale and Purchase Agreement – Contract excluding liability of third parties – Whether clause covered negligence – Whether clause valid under Unfair Contract Terms Act 1977

Under a Sale and Purchase Agreement dated 31 July 2006 the claimant agreed to buy from Glencore and two other sellers the entire issues share capital in Corona for £5,541,000. Glencore alone gave various warranties to the claimant. Clause 6.8 provided that the sellers would not, if a claim was made against them in connection with the sale of the shares, make any claim against Corona or its directors. In the present action the claimant asserted that Corona had been overvalued by over £2 million and that Glencore was in breach of warranty. Glencore obtained permission to issue claims against two directors of Corona, alleging breach of duty of care in preparing Corona’s accounts: Glencore sought to recover the sums due under the warranties. The court held, on the trial of preliminary issues, that: (1) clause 6.8 covered the potential claim against the directors, given that its commercial purpose was to prevent the value of the warranties being undermined, and the obvious claim which was contemplated by clause 6.8 was one in negligence; (2) clause 6.8 was clearly reasonable under the Unfair Contract Terms Act 1977, as it formed part of a carefully calibrated commercial agreement, although it was not necessary to decide whether the Act applied to a clause such as clause 6.8.

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