Takeda Pharmaceutical Company Ltd v Fougera Sweden Holding 2 AB

A further assurance clause gives effect to obligations already undertaken; it does not create the underlying obligation. Contractual duties to provide information or to co-operate will not be implied where the agreement expressly addresses the subject, where performance remains workable without the proposed term, or where the parties have not undertaken to achieve the suggested result. The court must interpret the agreement objectively against the factual background reasonably available when it was made, excluding negotiations. A later agreement permitting limited access to confidential information does not, without express language, impose a wider obligation to provide other information.

The claimant bought Nycomed from the defendant under a sale and purchase agreement. A Danish withholding-tax dispute remained unresolved. The claimant argued that the agreement and a later letter agreement required the defendant to provide information about the ultimate investors in the seller and not to obstruct access to it.

The court tried preliminary issues concerning whether those positive and negative obligations existed. The issues required consideration of whether the information was necessary to reduce the withholding-tax liability, whether it was within the defendant’s control, and how the relevant contractual provisions should be interpreted.

1. Preliminary issues answered in the negative. The defendant was not obliged under the sale and purchase agreement or the Letter Agreement to provide the Required Information, nor was it subject to the alleged negative obligation.
2. The factual matrix did not establish that the information was necessary. As at 19 May 2011, the Danish statutory position, published decisions and the Danish Ministry of Taxation’s position made it very unlikely that the information could secure or negotiate a reduction in withholding tax. The same conclusion applied as at 28 January 2015. The information was also not within the defendant’s factual control at either date.
3. Clause 16.1 was a further assurance clause. Applying Dear v Jackson [2013] EWCA Civ 89, it could assist in giving effect to an obligation already agreed, but could not itself establish the disputed obligation. The indemnity provisions allocated the risk of unresolved withholding tax and did not require resolution before the contractual cut-off date.
4. Clause 10.10 dealt expressly with the confidential investor information and prohibited the parties from seeking it, subject to the limited relaxation later made by clause 20 of the Letter Agreement. Clause 10.16 imposed obligations on the purchaser, not a duty on the seller to supply information. There was therefore no contractual basis for the proposed positive obligation.
5. The proposed implied duty to co-operate failed because the contract remained workable without it, and the subject was addressed expressly by clauses 10.10 and 10.19. The proposed duty not to obstruct likewise failed because there was no positive obligation to provide the information and no room for the implied term in light of the express provisions. The Letter Agreement did not amend the SPA so as to impose either obligation.