On 12 October 2020, the English High Court handed down judgment in respect of various preliminary issues in the case of Travelport Limited and others v WEX Inc. The dispute concerns the issue of whether or not the occurrence of the global COVID-19 pandemic engaged the material adverse effect ("MAE") provisions in an SPA in the context of a US$1.7 billion transaction, and therefore whether the purchaser under the SPA was entitled to back out of the deal. As part of determining a number of preliminary issues, it was necessary for the court to consider in detail how the relevant MAE provision should be interpreted. The decision underlines the importance of precise drafting and will assist those undertaking this exercise in future.
In circumstances where a period of consolidation in the North Sea oil and gas industry is predicted in response to the ongoing pandemic, we expect that parties will increasingly focus on MAE (and material adverse change) clauses in their negotiations, as a mechanism by which they can allocate risk for the current economic uncertainty.
More information can be found here: https://www.mayerbrown.com/en/perspectives-events/publications/2020/10/travelport-limited-and-others-v-wex-inc-mae-and-mac-in-a-post-pandemic-world
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe - Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
