Chalabi v Agha-Jaffar

Pushpinder Saini QC and Fraser Campbell succeeded before the Court of Appeal in upholding the judgment of Mrs Justice Gloster in the Commercial Court. The case concerned a warranty claim turning on whether sums received by the Respondents, under three Tax Deeds of Indemnity entered into alongside agreements for the sale of shares and assets, were sums received “for the sale” of the shares and assets. The Court of Appeal upheld Gloster J’s decision that they were not received “for the sale”, but were instead genuine indemnities to cover additional tax payable by the Respondents following a restructuring of the transaction. Lord Justice Longmore ruled that, when the Court of Appeal “is faced with two possible constructions of a commercial document … the more commercially sensible solution is to be preferred, particularly if it is already the solution which has commended itself to the Commercial Judge."