On 4 December 2024, following a five-day trial, Mr Justice Andrew Baker gave judgment in a dispute worth over €400 million relating to Spanish law governed investment agreements concluded between Banco de Sabadell, one of the major Spanish retail banks, and entities within the Cerberus group in July 2018 and August 2019 (the “Investment Agreements”) for the purchase of portfolios of Spanish real estate owned assets.
The dispute concerned the price payable in respect of real estate owned assets that had title registration issues, in relation to which the parties had agreed a mechanism to defer payment of part of the purchase price. The Judge found that Spanish law principles of contractual construction, which are in this respect the same across the Civil Code and Commercial Code, involve an investigation of what the parties agreed, regardless of whether the literal wording of what was expressed does not literally conform to what was agreed ([27]). Applying those principles, the Judge rejected the Cerberus entities’ argument that, in the event that the registration thresholds were not met, some €400 million of the purchase price was relinquished, applying Spanish principles of contractual construction.
In doing so, the Judge found (at [73]) that the Cerberus entities had put forward a false narrative which had been “created in an attempt … to justify or bolster an argument that the effect contended for by Cerberus had been discussed and agreed when the IAs were being negotiated and had a sensible commercial rationale”, and (at [72]) that cross-examination had demonstrated that the Cerberus entities’ evidence was a “narrative constructed for the litigation”.
The Judgment is accessible here.
James Collins KC, Matthieu Grégoire and Akash Sonecha represented Sabadell, instructed by Ben Davies, Catherine Eason, Marie Smale, Yana Ahlden and and Zoë Vanhegan of PCB Byrne.
