On 29 June 2018, Mrs Justice Moulder handed down judgment on an SPA indemnity claim arising from the sale of a Peruvian mining company by Glencore to MMG.
The case concerned the effect of tax assessments issued by the Peruvian tax authority to the mining company after the date of the SPA. The assessments asserted that the company had paid too little VAT, and had over-claimed for VAT credits.
The SPA contained a tax indemnity provision in a common form, which (in summary) rendered the sellers liable to indemnify the buyers in respect of tax which was “payable” by the company and which related to the period pre-closing.
The principal issue was whether the tax authority’s assessments meant that VAT was now “payable” in circumstances where, as a matter of Peruvian law, a taxpayer cannot be compelled to pay the tax asserted to be due, pending its appeal to the Peruvian tax court.
Mrs Justice Moulder accepted Glencore’s contention that it did not, with the consequence that no indemnity under the SPA can arise until the Peruvian tax court has ruled on the validity of the tax assessments.
The judgment can be found here.
Conall Patton appeared for Glencore.
London One Essex Court
Temple London EC4Y 9AR United Kingdom
Tel +44 (0)20 7583 2000
Fax +44 (0)20 7583 0118
Singapore Maxwell Chambers
#02-15 32 Maxwell Road Singapore 069115
Tel +65 6634 1363
Fax +65 6634 1370