AGEAS (UK) LTD V KWIK-FIT (GB) LTD AND ANOTHER

[2014] EWHC 2178 (QB), Queen's Bench Division, 4 July 2014, Mr Justice Popplewell

Insurance (indemnity) - Share purchase agreement - Breach - Measure of damages - Whether subsequent events affecting value of shares could be taken into account - Allocation of risk

Ageas agreed to purchase the entire issued share capital in KFIS from KFGB for £214.75 million. KFGB warranted the truth, fairness, accuracy and compliance with relevant accounting standards of the KFIS account, but subject to a £5 million cap on liability. At the same time Ageas took out warranty and indemnity insurance with AIG to protect itself against losses in excess of the £5 million. There were breaches of warranty and the claim by Ageas against KFGB was settled. AIG admitted liability but the dispute related to the value of warranty claim in excess of £5 million. Ageas claimed £12,635,000, whereas AIG argued that the loss was £3,792,000. AIG's case was that KFIS performed better after the sale and so to award Ageas the full value of its claim would be to overcompensate it.