Starbev GP Ltd v Interbrew Central European Holdings BV

Under an anti-avoidance deeming provision, the relevant return is calculated by reference to the actual proceeds of a deferred payment, including amounts actually withheld for warranty claims. A potential or maximum liability that was never withheld is not deducted.

Where a contractual formula excludes amounts for which payment has already been made, the exclusion is ordinarily applied by reference to what has in fact happened, not by retrospectively recalculating earlier amounts against later thresholds.

A statutory claim for interest need not be pleaded, but contractual interest must be pleaded and the court must give effect to the parties’ agreed circumstances and rate. A detailed interest claim raised after trial may be refused where it would require new disclosure and evidence.

The judgment concerned consequential matters following the court’s earlier decision in [2014] EWHC 1311 (Comm). The parties disputed the form of declarations concerning an anti-avoidance provision in a contingent value right, the calculation of an exclusion intended to prevent double recovery, payment, interest and costs.

The claimant sought to deduct the maximum amount that might have been withheld for warranty claims from the proceeds deemed to have been received. It also sought declarations on the double-recovery calculation. The defendant sought payment, permission to amend its pleading to claim contractual or statutory interest, and consequential relief.

The central issues were whether the deeming provision applied to actual or potential deductions, how the exclusion operated after a stepped investment threshold, and whether the post-judgment interest claim should be admitted.

1. Anti-avoidance declaration. The claimant was permitted to advance its new contention after judgment because the relevant contractual provisions were not disputed, no new factual enquiry was required, and deciding the point avoided leaving the overall position unresolved. Finality remained an important consideration.
2. The anti-avoidance deeming provision applied to payments made to the investor in respect of the Note when redeemed. The deemed Equity Return was therefore calculated by reference to the Note proceeds actually distributed, less amounts actually withheld for warranty claims. The maximum amount that could have been withheld, but was not withheld, was not deducted. The declaration made in the earlier judgment stood.
3. Double recovery. The exclusion in the definition of Excess Equity Return referred to Equity Returns in respect of which an Excess Return Payment had in fact already been made. It did not require retrospective recalculation by reference to a later stepped-up Investment Threshold. The claimant was entitled to the declaration it sought.
4. Interest. CPR 16.4(2) regulates the exercise of the statutory power to award interest under section 35A of the Senior Courts Act 1981; it does not remove that power merely because statutory interest was not pleaded. However, contractual interest must be pleaded. Where the contract specifies the rate and the circumstances in which interest is payable, those terms displace the court’s discretionary statutory power to that extent.
5. On the proper construction of clause 10.5 of the CVR, interest arose only on sums not paid within ten business days of their due date, unless subject to a good-faith dispute. Liability arose when the sum had been determined to be payable. The proposed detailed interest claim should have been advanced at trial, since it could require disclosure and evidence. Permission to re-amend was refused.
6. ICEH received a payment order for €129,147,872.39, together with post-judgment interest at 3 per cent above one-year euro LIBOR on a simple basis from 29 April 2014. Permission to appeal was granted to both parties. ICEH recovered 75 per cent of its costs, with an interim payment on account of £640,000.

This was a first-instance consequential judgment following the court’s earlier judgment in [2014] EWHC 1311 (Comm). The judgment itself records no subsequent appellate decision.