Aras & Ors v National Bank Of Greece SA

A contractual incentive fee is determined by the objective meaning of the agreements, read as a whole and in their commercial context. Where an agreement distinguishes an “Exit Event” from its completion, the event may occur when a binding disposal agreement is made, while payment may remain due only after the seller receives the consideration. A currency conversion required to compare values stated in different currencies should use the date of the relevant book value where that is the figure being compared. Consideration for a separate debt or shares in another group company is excluded where the contractual definitions confine the event to shares in the specified company. Estoppel by convention requires a sufficiently clear shared assumption, reliance and detriment or unconscionability.

Three senior executives of Finansbank claimed incentive fees from National Bank of Greece SA under materially identical Incentive Fee Agreements. NBG had agreed to sell its shareholding in Finansbank to Qatar National Bank under a Share Sale and Purchase Agreement dated 21 December 2015. Completion occurred on 15 June 2016.

The principal issues were whether the Exit Event occurred on execution of the sale agreement or completion; which Equity Book Value and exchange rate applied; whether consideration for subordinated debt and shares in Finans Leasing formed part of the Exit Value; and whether NBG was estopped from denying liability for a fee.

1. Contractual construction. Applying the objective approach in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, Arnold v Britton [2015] UKSC 36, Tartsinis v Navona Management Company [2015] EWHC 57 (Comm) and Wood v Capita Insurance Services Ltd [2017] AC 1173, the court construed the IFAs as a whole and in their documentary, factual and commercial context.
2. The Exit Event was the execution of the binding SSPA on 21 December 2015. Completion was a separate concept concerned with the time when NBG received the consideration. Accordingly, the relevant last Equity Book Value was the figure published on 30 September 2015, namely TL9,099,950,000.
3. The Turkish Lira Equity Book Value had to be converted into Euros using the exchange rate applicable on 30 September 2015. This preserved a comparison between the Exit Value and the Euro equivalent of the relevant book value. The resulting value of A exceeded one, so a fee was payable.
4. The US$910 million subordinated debt was excluded from C. The IFAs concerned consideration for the disposal of NBG’s shares in Finansbank, and the debt was a separate asset. The €38,886,563.04 paid for NBG’s shares in Finans Leasing was also excluded. The contractual definition of The NBG Holding referred to shares in Finansbank, while disposal of shares in subsidiaries required an additional agreement.
5. The estoppel by convention claim failed. Applying Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 and HM Revenue & Customs v Benchdollar [2009] EWHC 1310 (Ch), there was no sufficiently clear shared assumption that Finansbank could not be sold below book value. Reliance, detriment and unconscionability were also not established.
6. Each claimant was entitled to a fee. The precise amounts were to be calculated by agreement and an appropriate order drawn up.