Case Law Deciding Costs On Aborted Transactions

The High Court recently shed some clarity on the recovery of transactional costs if and when a financial transaction is cancelled. This was a result of the judgement passed in Roundshield Partners LLP v. Ciudad Real International Airport SL & Ors [2019] EWHC 2733 (QB) where Griffiths J ruled in favour of the defendants and held that their liability to pay the remaining sum was not established.

There were two key questions answered in the ruling:

1. Can the use of certain words (especially the clause in the contract of the case at hand) impose on the defendants a duty to pay the transactional costs?

The court held (here) that the terms used should be clear and unambiguous to enforce an extra duty and to decide on all expenses in full – not just at the point of invoicing.  Therefore, any contract clause should be fully informed to the defendants (other party entering the contract) and must be accurately tested for "adequately defined or sufficiently accurate"