Mining For Precedent: High Court Guidance On Material Adverse Event Clauses

In BM Brazil v Sibanye, the High Court has provided useful guidance on the interpretation of material adverse event (MAE) clauses under English law. 

In this case, the purchasers of a Brazilian mine argued that a MAE clause in an SPA had been triggered between exchange and completion, meaning that they could walk away from the deal. However, the judge was not persuaded and found that in seeking to terminate, the buyer had committed a repudiatory breach of the contract and the seller was entitled to damages. In so finding, the judge took the opportunity to provide helpful guidance on MAE clauses.

Background

The facts of the case were relatively simple.

• The deal concerned an open pit mine in Brazil.