Murray Holdings Limited v. Oscatello Investments Limited

Sidley has succeeded in obtaining a £41 million judgment for Murray Holdings Limited, an Isle of Man-incorporated subsidiary of Kaupthing ehf, ending a nine-year long High Court action concerning £130 million of proceeds from the 2008 sale of the Somerfield supermarket chain.

Murray’s claim sought rectification of a private equity-style payment waterfall provision contained in a 2007 framework agreement between Murray and several other parties. Those parties included the Trustees of the Tchenguiz Discretionary Trust (TDT) and the TDT’s principal investment vehicle, Oscatello Investments Limited, now in insolvent liquidation in the British Virgin Islands.

In granting the equitable remedy Mr. Justice Mann found that, by mistake, the language in the waterfall provision did not reflect the terms of the underlying commercial deal reached between the parties’ negotiators, which entitled Murray to the return of £44.15 million originally invested in Somerfield in 2005 (the actual amount in dispute had been varied by agreement between the parties to £41 million). The judgment is particularly notable for the manner in which the Court was prepared to look beyond the wording in the framework agreement and in certain pro-forma board minutes approved by the former directors of the respective investment vehicles at the time of execution. Instead, the Court gave effect to the economic terms agreed between the parties’ negotiators, as evidenced by their exchanges prior to execution of the contract.

The trial was heard over four days in October 2017, with Sidley delivering an important and significant result for Murray Holdings after several years of protracted litigation involving multiple competing claims to the sums in Court.

Murray International Holdings Limited, through its subsidiaries, offers steel stockholding and trading services in the United Kingdom and internationally. The company provides trading of secondary alloy materials, and metal stockholding, trading, and processing operations. In addition, the company – led by David E. Murray, David D. Murray, Ian B. Tudhope, H. Rose and Kenneth A. Cockburn, engages in the operation of a football club, as well as food and beverage outlets, opencast mining, waste recycling operations.

Sidley advised Murray Holdings with a team including Andrew Fox (Picture) and associate David Royce.

Involved fees earner: Andrew Fox – Sidley Austin LLP; David Royce – Sidley Austin LLP;

Law Firms: Sidley Austin LLP;

Clients: Murray International Holdings Limited;