International Court of Arbitration Cour internationale d'arbitrage ...

Recommendations

Info

484. Analysis of the letter of June 17.199995. The Arbitral Tribunal will first review the content of the letter of June 17,1999 before analysing the context in which it was signed (R.21).The second paragraph of the letter indicates that the letter serves to confirmthat the parties have agreed to waive their respective rights or deviate from certainprovisions in the SPA Core Minority Shareholders. The waivers that havebeen granted by the parties are listed below.1. Point 1 of the letter96. Point 1 of the letter provides that each of the parties shall waive any andall of its rights with respect to the condition precedent contained in Schedule Funder 4 of the SPA.Schedule F under 4 provides that Valvision shall have received and forwardedto Vision N.V. within 21 days from the day of signing of the agreement (i.e. theSPA Core Minority Shareholders) a letter from or on behalf of the bank lendersconfirming to the company (i.e. RCF) that these lenders agree to defer repaymentof principal on the relevant loans at least until the first anniversary of completionof the SPA.One of the conditions of the sale has therefore been modified and has facilitatedthe consummation of the sale as it removes from the purchaser the obligation toobtain further facilities from the banks.2. Point 2 of the letter97. Under point 2, the letter of June 17, 1999 provides that the terms and conditionscontained in Article 6 of the SPA shall not apply to either of the partiesand each of the parties waives its rights with respect to that provision.Article 6 provides for a purchase price adjustment mechanism. A draft completionbalance sheet had to be prepared by the purchaser's accountant and reviewedby the seller's accountant. The accountants together, or with a thirdparty in case of disagreement, had to finally determine the completion balancesheet binding on the parties. Subject to the final determination of the completionbalance sheet, the purchase price could be adjusted according to a formuladescribed in Article 6.7. It appears from the detail of Article 6.7 that the purchaseprice adjustment could result in a payment from the seller to the purchaseror from the purchaser to the seller.S harehold-Consequently, by entering into provision no. 2 of the letter of Junec ion N V waived the possibility of requesting from the Core Mi;_E'lr10 V-4-1 i CCUR INIT; E°PIAThONAI F D'ARRITRAGF %RA02338488/0.31/16 Oct 2002INTERNATIONAL COURT OF ARBITRATIONL CHAMBER DF
49ers a price adjustment, which might have entitled it to receive a higher purchaseprice on the basis of the Completion Balance Sheet.Vision N.V. and Vision B.V. admitted during the hearing that point 2 of the letterof June 17, 1999 entailed a modification of the conditions under which the salewas being transacted with the Minority Shareholders:`That is the adjustment clause. The famous adjustment clause- both of the parties, sellers and buyers, did not need thatclause. They were on a perfect understanding of the financialsituation. The company had it in order to expedite the implementationof the sale. " (Tr. 10/7/2001, p. 55, line 47).98. The Arbitral Tribunal is of the opinion that this modification might have hadsubstantial consequences for the price. If this clause had been implementedbetween Valvision and Vision N.V., Valvision might have had to pay a price adjustmentto Vision N.V. By waiving the application of Article 6.7, Vision removedfrom the Core Minority Shareholders the risk of having to pay a price adjustmentlater. Point 2 of the letter therefore placed the Minority Shareholdersin a position that was potentially more favourable than that of Valvision: they didnot bear an outstanding risk of having to pay a price adjustment later.99. In R.sub 5, Vision N.V. and Vision B.V. indicated that the price adjustmentcould possibly only lead to a minor decrease in the price and that, in order toavoid time consuming and costly procedures with accountants after the date ofclosing, Vision N.V. and the Core Minority Shareholders had decided to waivethe clause for mere practical reasons (page 11).This assertion that the price adjustment would only have led to a minor decreaseof the price is not evidenced by Vision N.V. and Vision B.V. and the ArbitralTribunal therefore remains of the opinion that the waiver introduced by point2 of the letter was a substantial modification of the obligations, potentially in favourof the Core Minority Shareholders.3. Point 3 of the letter100. Pursuant to point 3 of the letter of June 17, 1999, the seller shall reimburseto the purchaser an amount of FRF 800,000 in respect of certain severancepayments made by RCF. This amount shall be set-off with the originalpurchase price. This waiver refers to the dismissal of Mr. Esgain, which hadbeen requested by Valvision (Tr. 10/7/2001, page 56, line 37 and following).101. In C.sub 5 , Valvision outlined the fact that the pre-eptingShareholders and vision N.V. agreed to reduce the purcha10NQa byFRF Ngro800,000 as an offset to account for the obligation of Vision to pay for the by`tnseverance costs from Mr. Esgain, whereas the actual sever nia pAyM% 1 ,111. ,ARBITRAGEA02338488/0.31/16 Oct 2002IN T ERNAAf'O A,L CCUR? OF ARBITRATIONAM 8are-;;CiO
Page 1 and 2: International Chamber of CommerceTh
Page 3 and 4: In the matter of an arbitrationBETW
Page 5 and 6: 37. Conclusion 545. The context of
Page 7 and 8: 51. ABBREVIATIONS - DEFINITIONSP. A
Page 9 and 10: 7II.THE PARTIESThe parties in this
Page 11 and 12: 9agreement entered into in 1995 bet
Page 13 and 14: 115. The Terms of Reference were si
Page 15 and 16: 13On February 6, 2001, a witness su
Page 17 and 18: 15In particular, the Arbitral Tribu
Page 19 and 20: 17On April 15, 1999, the seller sen
Page 21 and 22: 19On the same day, Vision N.V. waiv
Page 23 and 24: 21Valvision had incurred substantia
Page 25 and 26: 23an amount of FRF 337,100 (= 51,39
Page 27 and 28: 251. IN GENERAL§1. THE JURISDICTIO
Page 29 and 30: 27The Arbitral Tribunal is of the o
Page 31 and 32: 2949. The question arises as to the
Page 33 and 34: 3153. As a conclusion, the Arbitral
Page 35 and 36: 33paragraphs of this provision appe
Page 37 and 38: 35bank employees, including Sunday.
Page 39 and 40: 37could reasonably derive from each
Page 41 and 42: 39§5. VISION N.V. AND VISION B.V.'
Page 43 and 44: 4180. In R.sub 5, Vision N.V. and V
Page 45 and 46: 43UPC se developpe rapidement en Eu
Page 47 and 48: 45the General Agreement and, more s
Page 49: 47towards the seller. (See also, Pr
Page 53 and 54: 51Should Vision N.V. and Vision B.V
Page 55 and 56: 53F.2: "Seller shall furnish Purcha
Page 57 and 58: 55He reiterated the same message on
Page 59 and 60: 57Such interpretation, which is con
Page 61 and 62: 59Vision N.V. also allowed the Core
Page 63 and 64: 61123. The Arbitral Tribunal is how
Page 65 and 66: 63128. The concept of "damage" refe
Page 67 and 68: 65the Hoge Raad of February 20, 197
Page 69 and 70: 672. The abstract method138. This t
Page 71 and 72: 69presented together to the judge/a
Page 73 and 74: 71Proportion of Mediareseaux' purch
Page 75 and 76: 733. Valvision lawyers' fees149. Va
Page 77: 75Place of arbitration : Londonv V,

International Court of Arbitration Cour internationale d'arbitrage ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?