Gruber & Ors v AIG Management France, SA & Ors

Permission to appeal requires a real, more than fanciful, prospect of success. An appellate court may be freer to reconsider contractual construction, but permission should still be refused where the proposed grounds merely reargue detailed conclusions applying the governing law to bespoke contractual language. Permission is also unlikely where the challenged conclusion is fact-sensitive and materially depends on the trial judge’s assessment of witness evidence.

The parties sought permission to appeal from the substantive judgment handed down earlier the same day. The claimants sought permission concerning the dismissal of their tort claims against AIG Inc. The defendants sought permission concerning the construction and effect of deferred bonus plans governed by Connecticut law, including amendments made in December 2008, the meaning of “losses” in Section 4.01(b)[1], and the timing and content of restoration obligations.

The court considered whether either side had a realistic prospect of success on the proposed grounds.

1. Claimants’ application. Permission to appeal was refused. The dismissal of the tort claims against AIG Inc depended principally on the evidential gaps and the absence of the necessary state of mind at parent-company level. The conclusion was also materially assisted by the judge’s assessment of the sincerity of the defendants’ principal witness. It was therefore a fact-sensitive conclusion unlikely to be disturbed on appeal.
2. Defendants’ application. The court accepted that the proposed issues concerning construction under Connecticut law were, in principle, matters on which the Court of Appeal might take its own view. However, the proposed grounds had no realistic prospect of success.
3. The December 2008 amendments were valid. The court had not separately addressed whether they advanced a core contractual purpose because that issue had been argued by the claimants and rejected. In any event, the amendments addressed possible gaps concerning the cut-off for restoration and payment obligations and potential difficulties arising from section 409A. They plainly advanced core contractual purposes.
4. The amendments were not shown to make the plans less favourable to participants. The court had applied the plain contractual language, informed by the agreed effect of section 409A.
5. The interpretation of “losses” in Section 4.01(b)[1] was a straightforward application of the scheme’s language, including its contrast with other matters relevant to distributable income. The language did not provide for negative balances and required restoration and payment.
6. The proposed challenge to the meaning of “subsequently”, commercial workability, and the practical funding consequences was substantially a reargument of the detailed contractual analysis. Permission was refused to the defendants. Any further application had to be made to the Court of Appeal.

The parties sought permission to appeal from the substantive judgment handed down earlier the same day. The citation of that judgment was not stated. Permission was refused by the High Court (Commercial Court); any renewed application was to be made to the Court of Appeal.