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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Global Asset Capital, Inc & Anor v Aabar Block S.A.R.L. & Ors [2017] EWCA Civ 37 (01 February 2017) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2017/37.html Cite as: [2017] 4 WLR 163, [2017] EWCA Civ 37, [2017] WLR(D) 63

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
MR JUSTICE WALKER
[2016] EWHC 298 (Comm)

		Royal Courts of Justice Strand, London, WC2A 2LL
		01/02/2017

Lord Justice Hamblen :

Introduction

1. The Appellants ("Aabar") appeal against the decision of Walker J dated 18 February 2016 whereby he dismissed their applications for summary judgment and/or strike out of the claims made against them by the Respondents ("Global").
2. Global claim that on 6 May 2015 Aabar agreed to sell to them a package of rights and other debt interests for €250 million. (The "Alleged Contract").
3. Aabar contend that Global have no real prospects of establishing that a legally binding and enforceable contract was concluded as alleged or at all and that the judge was wrong to conclude otherwise.

Factual and Procedural Background

4. The judge set out the factual background at paragraphs 13 to 34 of the judgment and the procedural background at paragraphs 36 to 44 of the judgment. Neither party took issue with that detailed summary which I adopt for the purpose of this judgment.
5. In outline, the relevant parties are as follows:

(1) Aabar Block is a company resident in Luxembourg and an indirect subsidiary of Aabar Investments PJS;

(2) Aabar Investments PJS is a company resident in Abu Dhabi;

(3) The Third Defendant, Robert Tchenguiz ('Mr Tchenguiz') is a businessman and entrepreneur who owns and controls a company called Edgeworth Capital ('Edgeworth').

(4) Global is a company incorporated in Delaware; and

(5) The Second Respondent, Mr Glenn Maud ('Mr Maud') is a property investor who holds an interest in a group of companies, referred to as the Marme Group.

6. In September 2008, Mr Maud and Mr Derek Quinlan ('Mr Quinlan') acquired an interest in the Spanish headquarters of the Santander Banking Group, 'Ciudad Financiera', through the Marme Group. This acquisition was financed in part by RBS. RBS granted the following loans in respect of this acquisition:

(1) A senior loan to Marme of €1.575 billion (arranged by RBS and others);

(2) A personal loan of €75 million to Mr Maud and Mr Quinlan personally; and

(3) A junior loan of €200 million to Ramblas Investments BV ('Ramblas') which was a company within the Marme Group. Mr Maud and Mr Quinlan provided a personal guarantee of this loan for up to €40 million.

7. On 30 November 2010, Aabar Block and Edgeworth acquired RBS' interests in the loans made to Mr Maud and Ramblas, hereafter referred to as 'the Aabar rights'. Mr Maud and Ramblas defaulted on payments, following which Aabar Block and Edgeworth obtained judgments against them:

(1) Further to a consent order dated 17 June 2011, Mr Maud agreed to pay Aabar and Edgeworth €52.5 million plus interest and Ramblas agreed to pay Aabar and Edgeworth €216.5 million;

(2) Pursuant to an order dated 30 January 2015 (as varied by the Court of Appeal), Ramblas was ordered to pay to Aabar and Edgeworth over €91 million due under the terms of an upside fee arrangement; and

(3) On 30 November 2015, Aabar Block and Edgeworth obtained judgment against Mr Maud in respect of the €40 million personal guarantee of Ramblas' liabilities.

8. On 5 June 2014, Aabar and Edgeworth served a statutory demand on Mr Maud. Mr Maud applied to set it aside. This application was due to come on for hearing on 12 May 2015. The hearing was therefore imminent at the time of the Alleged Contract. Mr Maud's application was dismissed by Rose J in a judgment dated 8 June 2015.
9. Mr Maud claimed that, in the period between June 2011 and May 2015, he made efforts to settle his liabilities with Aabar and Edgeworth but this was continually thwarted by Mr Tchenguiz. Given the resistance of Mr Tchenguiz, Mr Maud said that he decided to seek to purchase the Aabar rights directly from Aabar.
10. Global allege that on 23 April 2015, Mr Maud sent Aabar a letter which was marked 'WITHOUT PREJUDICE – SUBJECT TO CONTRACT' further to which Global and Mr Maud proposed to pay €250 million for the Aabar rights ("the Offer Letter").
11. Global allege that on 5 May 2015, Mr Al-Husseiny, who was at the time CEO of Aabar Investments PJS, informed Mr Maud that the Board would be meeting on 6 May 2015 and would be considering the Offer Letter.
12. On 6 May 2015, Mr Al-Husseiny telephoned Mr Maud. Global's case is that during the course of this telephone conversation the Alleged Contract was concluded subject to two conditions ("the Conditions"), namely that Mr Maud (1) "resend the Offer Letter in 'open and binding form'" and (2) "provide satisfactory evidence of his ability to fund the transaction".
13. Later on 6 May 2015 Mr Maud sent Mr Al-Husseiny an email stating: "As discussed on our call please find attached a copy of our letter of offer previously sent to Aabar. I will send funding letter under separate cover shortly".
14. On 7 May 2015 Mr Maud texted Mr Al-Husseiny stating: "Fully committed binding terms and funding commitment will follow either later today or tomorrow".
15. Later the same day Mr Maud sent Mr Al-Husseiny an email stating: "… as discussed on our call we expect to provide binding terms and commitments to you no later than tomorrow for your acceptance".
16. On 9 May 2015, Mr Maud sent an email to Mr al-Husseiny which stated that:

"As requested please find attached binding and committed letters of finance and offer.

If possible, I look forward to receiving your confirmation of acceptance of our offer during the course of Sunday. Thereafter we can meet in either Abu Dhabi or London to suit to agree the mechanics of how to progress to completion as soon as possible".

17. The attached letter of offer repeated the 'Key commercial terms' of the Offer Letter but also included various additional and different terms ("the 9 May Letter"). The attached letter of finance was a letter from the Managing Director at Madison International Realty LLC ('Madison') which Global contends provided the requisite evidence of its ability to fund the transaction ("the 9 May Funding Letter"). It is Global's case that the Conditions were thereby satisfied.
18. On 10 May 2015, Mr Al-Husseiny responded by stating that Mr Maud's offer was not accepted and that there were no ongoing negotiations between the parties.
19. On 8 June 2015, Global issued a claim against Aabar for enforcement of the Alleged Contract. Global sought a declaration that the agreement was valid and binding as well as specific performance of the terms of the contract. Global also sought an injunction against Mr Tchenguiz, restraining him from procuring Aabar's breach of the Alleged Contract.
20. On 27 June 2015, Aabar applied under CPR Parts 24 and/or 3.4 for the summary dismissal and/or strike out of Global's claims against them on the basis that Global's claims had no real prospects of success. On 30 June 2015, Mr Tchenguiz also brought applications for the summary dismissal and/or strike out of Global's claims against him (these are not the subject of the appeal). Both applications were heard by the judge over 1 ½ days on 11-12 November 2015.
21. The judge dismissed both applications in a judgment which was handed down on 18 February 2016. By Order dated 26 April 2016, Christopher Clarke LJ granted Aabar permission to appeal on the papers. He also vacated a CMC in the action and ordered that no further CMC should take place pending the determination of the appeal or further order of the Court of Appeal.

The evidence

22. Aabar's application was supported by a witness statement from Mr Robinson of their solicitors, Freshfields Bruckhaus Deringer LLP. This set out the background, the nature of Aabar's case and the principal arguments.
23. Mr Maud provided a witness statement in support of Global's case. This confirmed the case as set out in the Amended Particulars of Claim. In relation to the Alleged Contract this provides as follows:

"The Agreement

12. In light of Mr Tchenguiz's conduct, Mr Maud together with GAC made an offer to Aabar for the acquisition of Aabar's interests alone, without Edgeworth's interests in the Junior Loan, but including Aabar's interests against Edgeworth. That offer was set out in an undated letter to Aabar, marked without prejudice and subject to contract, signed by Mr Maud and on behalf of GAC and sent to Aabar and Aabar PJS on or around 23 April 2015 (the "Offer Letter"). The Offer Letter, a copy of which is annexed hereto, contained the following material, express terms (described in the Offer Letter as "Key commercial terms"):

(1) The offer was to purchase all rights and benefits of Aabar and their affiliates ' in relation to or in connection with' Marme and its holding companies (the "Aabar Rights"), specified at Clause 1 as including: (i) all rights and benefits under the Finance Documents as defined in the Junior Facility Agreement; (ii) all rights and benefits under the Finance Documents as defined in the Personal Loan Agreement; (iii) all right and benefits under any and all arrangements with Mr Quinlan in relation to the Marme Group or otherwise; (iv) any and all rights against third parties in connection with the acquisition of the Junior Loan from RBS; (v) all rights and benefits against Edgeworth and/or any of its affiliates or related parties, including any and all rights and benefits under any loans that Aabar or their affiliates had made to Edgeworth and/or any of its affiliates or related parties; and (vi) the right to purchase the shares in the Aabar entity or entities that hold the aforesaid rights for an additional purchase price of €1.

(2) Clause 2 provided that the purchase price for the Aabar Rights would be €250 million.

13. On 5 May 2015 at or around 18:00 London time, the Chief Executive Officer of both Aabar Block and Aabar PJS, Mohamed Al-Husseiny, telephoned Mr Maud and informed him that Aabar PJS' board would be meeting the following day and would consider the Offer Letter.

14. On 6 May 2015 at or around 15:37 London time, Mr Al-Husseiny again telephoned Mr Maud. Mr Al-Husseiny stated that he was telephoning Mr Maud with some of his colleagues from Aabar PJS board, to tell him that the board had met, chaired by Suhail Al-Mazrouei, and that they had accepted Mr Maud's offer on behalf of Aabar Block and Aabar PJS. Mr Maud thanked Mr Al-Husseiny and asked, "What do we need to do now to progress it?" Mr Al-Husseiny responded that Mr Maud needed (i) to resend the Offer Letter in "open and binding form" and (ii) to provide satisfactory evidence of his ability to fund the transaction (the "Conditions"). Mr Maud said that he would do so. Mr Al-Husseiny expressed no other condition or caveat on Aabar's acceptance of the Offer Letter.

15. By the Offer Letter and these telephone communications, the Claimants and Aabar concluded a contract for the purchase by the Claimants of the Aabar Rights from Aabar, on the terms set out in the Offer Letter and subject to the satisfaction by the Claimants of the Conditions (the "Agreement" as defined above)."

24. Aabar disputes Global's account of events, but for the purposes of their applications they do not seek to go behind Global's account of the facts as set out in their pleading.
25. In considering that case the key documents are the Offer Letter, the 9 May Letter and the 9 May Funding Letter. The full text of these documents is set out in the Addendum to this judgment.

The Issues

26. The issues which arise on the appeal are:

(1) Whether the judge was wrong to conclude that he should not take account of the parties' communications immediately following the 6 May 2015 telephone call when considering whether the Alleged Contract had been made on that date.

(2) Whether the judge was wrong to conclude that Global have real prospects of establishing their case that the Alleged Contract was concluded on 6 May 2015.

(3) Whether the judge was wrong to conclude that Global's case that the Conditions were satisfied had real prospects of success.

Striking out/summary judgment

27. It was common ground that for the purpose of the present case the applicable principles concerning strike out and summary judgment may be conveniently summarised as follows.

(1) The court must consider whether the case of the respondent to the application has a realistic as opposed to fanciful prospect of success – in this context, a realistic claim is one that carries some degree of conviction and is more than "merely arguable".

(2) The court must not conduct a "mini-trial" and should avoid being drawn into an attempt to resolve conflicts of fact which are normally resolved by the trial process.

(3) If the application gives rise to a short point of law or construction then, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should "grasp the nettle and decide it".

See Easy Air Limited v Opal Telecom Limited [2009] EWHC 339 (Ch) at [15]: Arcadia Group Brands Ltd & Ors v Visa Inc [2014] EWHC 3561 at [19]; Tesco Stores Ltd v Mastercard Incorporated [2015] EWHC 1145 (Ch) at [9]-[10]:

Issue (1): Whether the judge was wrong to conclude that he should not take account of the parties' communications immediately following the 6 May 2015 telephone call when considering whether the Alleged Contract had been made on that date.

28. It is well established that when deciding whether a contract has been made during the course of negotiations the court will look at the whole course of those negotiations – see Hussey v Horne-Payne (1878) 4 App Cas 311.
29. As Lord Cairns observed in that case at 316:

"…You must not at one particular time draw a line and say, "We will look at the letters up to this point and find in them a contract or not, but we will look at nothing beyond". In order fairly to estimate what was arranged and agreed, if anything was agreed between the parties, you must look at the whole of that which took place and passed between them".

30. The rationale of this approach is that focusing on one part of the parties' communications in isolation, without regard to the whole course of dealing, can give a misleading impression that the parties had reached agreement when in fact they had not - see Lord Selborne in Hussey at 323.
31. In principle, the approach in Hussey and its rationale apply regardless of whether the negotiations are conducted in writing, orally or by conduct or by a combination of those means of communication.
32. This is borne out by authority. For example, in RTS Flexible Systems Ltd v Molkerei Alois Müller Gmbh & Co KG (UK Production) [2010] UKSC 14, [2010] 1 WLR 753, at [49] Lord Clarke, giving the judgment of the Supreme Court, cited with approval a passage from Lloyd LJ's judgment in Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 601 in which he stated at 619:

"(1) In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole…."

Lord Clarke then commented:

"The same principles apply where, as here, one is considering whether a contract was concluded in correspondence as well as by oral communications".

33. This is illustrated by the fact that Pagnan concerned a contract allegedly concluded during the course of oral and written communications and Hussey concerned dealings involving both correspondence and meetings.
34. Despite this clear line of authority, the judge concluded that Global had a realistic prospect of establishing that reference cannot be made to events after 6 May 2015 in relation to the question of whether a contract was made on that day and that he should not therefore have regard to such events. He gave four reasons for so concluding, namely (1) it was arguable that the approach in Hussey only applies to contracts concluded in writing; (2) the principle that one cannot "interpret the meaning of words used in a contract by reference to what happened later"; (3) the case of Perry v Suffields [1916] 2 Ch 187 in which the Court of Appeal held that "once it is shown that there is a complete contract, further negotiations between the parties cannot, without the consent of both, get rid of the contract already arrived at" – per Lord Cozens-Hardy MR at 192; and (4) Aabar were not entitled to rely on the communications to cast doubt on Mr Maud's account of the 6 May telephone call.
35. As to (1), for reasons already set out this is wrong as a matter of principle and authority.
36. As to (2), this is of course correct when one is considering the interpretation of words used in a contract but here the issue is whether a contract was made, not what the contract means.
37. As to (3), this too is correct once it is established that a contract has been concluded. It does not, however, apply to the prior question of whether a contract has been concluded.
38. As to (4), Aabar do not rely on the communications to challenge Mr Maud's account of the telephone call. For the purpose of its applications they accept that account. The communications are relied upon in support of their case that objectively on 6 May 2015 the parties were not as one as to the formation of a binding and enforceable contract for the sale of the Aabar rights.
39. For all these reasons I consider that the judge was wrong to conclude that he should not take account of the parties' communications immediately following the 6 May 2015 telephone call when considering whether the Alleged Contract had been made on that date. Indeed at the hearing Global no longer sought to uphold his decision on this issue.

Issue (2): Whether the judge was wrong to conclude that Global have real prospects of establishing their case that the Alleged Contract was concluded on 6 May 2015.

40. The Offer Letter was "subject to contract". It is well established that dealing on such a basis negates contractual intention – see, for example, London & Regional Investments Limited v TBI Plc & Anr [2002] EWCA Civ 355 at [38]-[39].
41. I agree with Aabar that Global's pleading advances a case based on the offer being that set out in the Offer Letter which was accepted by Mr Al-Husseiny on behalf of Aabar during the 6 May 2015 telephone call. Paragraph 12 of the Amended Particulars of Claim pleads that the "offer" was "set out" in the Offer Letter. Paragraph 14 pleads that Mr Al-Husseiny said that "they had accepted Mr Maud's offer" and states that no caveat other than the Conditions was placed "on Aabar's acceptance of the Offer Letter". Paragraph 15 states that by the Offer Letter and these telephone communications a contract was made "on the terms set out in the Offer Letter".
42. Since the Offer Letter was "subject to contract" acceptance of it could not make a contract. As Christopher Clarke LJ stated when giving permission to appeal:

"What is pleaded is that Mr Al-Husseiny said in the telephone conversation that the Board had accepted Mr Maud's offer. Mr Maud's offer, being subject to contract, was not, however, open for acceptance or, at best, would, if accepted, amount to no more than an agreement to agree. Acceptance of that offer would not remove the subject to contract condition".

43. No doubt in recognition of this difficulty, at the hearing before the judge Global submitted that on a proper analysis their case was that it was Aabar who were making an offer which Mr Maud was accepting. Aabar's oral offer was that they were prepared to sell the Aabar rights on the terms set out in the Offer Letter subject to satisfaction of the Conditions and Mr Maud orally accepted that offer. The judge accepted that this was Global's pleaded case and that it had a realistic prospect of success.
44. As already stated, I do not accept that that is Global's pleaded case. The pleaded case is founded on an offer by Global which Aabar accepted. Even if the pleaded case was as Global contends, neither the judge nor Global have identified how the words allegedly used in the telephone conversation do or can amount to an offer by Aabar and an acceptance by Global. The words "What do we need to do now to progress it" are not words of acceptance. Nor is a requirement that Global resend the Offer Letter in open and binding terms consistent with the making of an offer by Aabar or of an offer that had already been or was thereby being accepted.
45. Further, Global not only needs to identify in the pleaded conversation an offer by Aabar and an acceptance by Global but they also need to show that they have a realistic prospect of establishing that the parties agreed to waive the subject to contract status of their dealings. Such an agreement needs to be unequivocal and the court will not lightly so hold - see RTS Flexible Systems at [56] and [67].
46. Again, neither the judge nor Global have identified how the words used in the pleaded conversation do or can amount to such an unequivocal agreement. Further, a requirement to resend an offer in open and binding terms is inconsistent with there already being an agreement that the terms are open and binding.
47. At the appeal hearing Global sought to advance a yet further argument in an attempt to get round these difficulties. It was suggested that, based on Aabar's pleading rather than their own, Mr Al-Husseiny may not have had the Offer Letter at the time of the conversation which was why he was requiring it to be resent. Despite not having the Offer Letter Mr Al-Husseiny was nevertheless agreeing to sell the Aabar rights at the agreed price to Global. Those were the key commercial terms of the agreement and the only terms that needed to be agreed for there to be a certain and binding agreement.
48. This is a wholly implausible way for experienced commercial parties to conclude a €250 million deal. It is all the more so bearing in mind that one of the parties had a history of default and non-payment of significant debts to the other. In any event it is not Global's pleaded case. The pleaded case is that the offer made was that set out in the Offer Letter. On 5 May 2015 Mr Al-Husseiny told Mr Maud that the board would be meeting the following day to "consider the Offer Letter". In the 6 May 2015 conversation Mr Al-Husseiny told Mr Maud that the board had met and had accepted Mr Maud's offer and that other than the Conditions there was no caveat on Aabar's "acceptance of the Offer Letter". The Alleged Contract concluded thereby was "on the terms set out in the Offer Letter". The only contract alleged is one on the terms set out in the Offer Letter. Those terms include but are not limited to the "key commercial terms". Nor are there any pleaded words which limit the discussion or agreement to such terms. The pleaded conversation and agreement is based on "the terms set out in the Offer Letter".
49. For all these reasons, even if one has regard to the 6 May 2015 conversation alone, I do not consider that Global have real prospects of establishing that the Alleged Contract was concluded thereby. The foundation stone of that conversation was a subject to contract offer. Global's pleading and evidence do not identify a realistic case as to how that subject to contract status was agreed to be waived or how a binding offer and acceptance was made during the alleged conversation.
50. That no contract was concluded on 6 May 2015 becomes even clearer if one has regard to subsequent dealings and in particular the 9 May Letter.
51. The 9 May Letter refers to a "Proposed" transaction. It required Aabar's agreement that it was willing to proceed with that "Proposed Transaction". Thus the Documentation and Exclusivity terms provided that:

"Documentation Upon your agreement that you are willing to proceed with the Proposed Transaction we will provide market standard documentation for the transfer of Aabar's Rights for your review.

Exclusivity Upon your agreement that you are willing to proceed with the Proposed Transaction each party agrees that it will not pursue or seek to pursue any alternative transaction with respect to Aabar's Rights for 15 days from the date of this letter." (emphasis added)

52. Not only was Aabar's agreement required but unless their acceptance of the offered terms was made by 6pm on 11 May 2015 the offer was going to expire. The Expiry term provided:

"Expiry This letter will expire at 6.00 pm London time on 11 May 2015 unless accepted by you by that time".

53. The 9 May Letter was therefore put forward on the basis that Aabar needed to accept and agree its terms, and to do so promptly, for there to be a contract. That is plainly inconsistent with the parties having already concluded a contract on 6 May 2015.
54. Further, the 9 May Letter put forward a number of materially different terms to the Offer Letter, which is again inconsistent with there already being a contract. In particular, (i) the scope of the releases and waivers required was drafted in much wider terms; (ii) the 9 May Letter contained an expiry date and time whereas the Offer Letter did not; (iii) the 9 May Letter contained provisions relating to Edgeworth, but the Offer Letter did not; (iv) the 9 May Letter contained provisions relating to expenses, but the Offer Letter did not; (v) the 9 May Letter contained different conditions precedent to the Offer Letter; and (vi) the 9 May Letter stated a different date for completion of the transaction to the Offer Letter.
55. Yet further, the inclusion of the exclusivity provision is significant as it invited Aabar to engage in further discussions about the terms of the "Proposed Transaction" during a defined exclusivity period. The obvious purpose of so providing was to enable a contract to be made. That too is inconsistent with there already being a contract.
56. In response Global focused on the wording of the email from Mr Maud which attached the 9 May Letter and the 9 May Funding Letter. They stressed that this referred to "confirmation" of acceptance and proposed a meeting to agree the "mechanics" of how to progress to completion. They submitted that it was the key commercial terms of which confirmation of acceptance was being sought. That confirmation was being sought for good order, the terms already having been accepted. The other terms in the letter were "mechanics" and therefore the stated need for Aabar's agreement or acceptance to them did not undermine the existing binding agreement to the key commercial terms.
57. There are a number of difficulties with this case.
58. First, as already made clear, the pleaded case is that a contract was made on the terms of the Offer Letter. That means all the terms of that letter. As the letter states, it sets out "the key terms" of the offer. The "key commercial terms" were part of those key terms, but so were the other terms and "conditions". There is no pleading that the contract was limited to the key commercial terms of the Offer Letter nor has any plausible argument been advanced as to how the pleading or evidence could result in such a limited agreement being made.
59. Secondly, a contract could not be made simply on the basis of the key commercial terms. The parties, for example, are not there described. The identification of the parties is obviously a key term of any contract. In the present case the identity of the parties was a potentially significant issue since both the Offer Letter and the 9 May Letter refer to Madison as a joint purchaser, even though, as the 9 May Funding Letter made clear, it had yet to commit to funding.
60. Thirdly, the content of the "Other terms" and the "Conditions" set out in the 9 May Letter do not reflect mere "mechanics". These are important substantive provisions. Indeed the whole letter was made subject to the Expiry term, even though this was not a key commercial term.
61. For all these reasons the 9 May Letter confirms that Global have no real prospects of establishing that the Alleged Contract was made on 6 May 2015 and I consider that the judge was wrong to conclude otherwise.

Issue 3: Whether the judge was wrong to conclude that Global's case that the Conditions were satisfied had real prospects of success.

62. The first Condition required Mr Maud to "resend the Offer Letter in 'open and binding form'".
63. I do not consider that Global have real prospects of establishing that the 9 May Letter satisfies that Condition. In particular:

(1) "Resending" a letter means sending the same letter as has already been sent. The 9 May Letter was not the same letter. It was in materially different terms.

(2) The Condition presupposed fulfilment by the sending of a letter; not a letter which called for and required agreement and acceptance.

(3) The Condition necessarily required the offer to be in the same terms since this was the offer which had been accepted. It could not be met by an offer in different terms. The 9 May Letter was in materially different terms and indeed was a new offer.

(4) The 9 May Letter continued to make the parties' agreement subject to contract since it was a condition that it be "subject to" agreement on final form documentation. It was not therefore "binding", as was required.

64. Global contended that it was sufficient to resend an offer with the key commercial terms, which it did. The Condition, however, was to resend "the Offer Letter", not the key commercial terms of the Offer Letter. As already stated, the offer made by the Offer Letter comprised all the terms and conditions set out therein, not merely the key commercial terms.
65. The second Condition required Mr Maud to provide "satisfactory evidence of his ability to fund the transaction".
66. I do not consider that Global have real prospects of establishing that the 9 May Funding Letter satisfies that Condition. In particular:

(1) The 9 May Funding Letter did not impose any obligation on Madison to provide funding. It expressed Madison's "intention" to fund the proposed transaction subject to a number of significant matters, such as due diligence. It expressly stated that "this letter does not, and is not intended to, create… any contractual relationship or other obligation of any kind between any of Madison, GAC, [Glenn Maud] or Aabar".

(2) The 9 May Funding Letter was accordingly a non-binding indication of support for the transaction from Madison, subject to a number of caveats. It was not evidence that Mr Maud was able to fund the proposed transaction. It was, at best, evidence of a potential ability to do so.

(3) If "satisfactory evidence" means objectively satisfactory then the 9 May Funding Letter was not such evidence. If it was not even evidence of an ability to fund the transaction then it cannot have been "satisfactory" evidence of such an ability.

(4) If "satisfactory evidence" means subjectively satisfactory (i.e. satisfactory to Aabar) then it was not so satisfactory, as Aabar made clear in its email of 10 May 2015 and its pleading, and, if necessary, it was reasonable for Aabar so to conclude.

67. The judge suggested that the proper interpretation of the Conditions was an issue upon which evidence as to the background to the agreement and the context of the conversation might be relevant. In my judgment, however, the terms of the Conditions can and should be given their natural and ordinary meaning. In any event there was no pleaded factual matrix (as the Commercial Court Guide requires there to be – see C1.2(h)). Nor does Mr Maud's witness statement put forward any background evidence that would have a bearing on the meaning of the Conditions.
68. In my judgment Global accordingly have no real prospects of establishing that either Condition was satisfied.
69. In their pleadings Global raised a further point that even if the Conditions were not satisfied the Alleged Contract remained and remains in existence as there was no time limit for the satisfaction of the Conditions. This point was realistically not pressed at the hearing. It was both obvious and necessary for these Conditions to be satisfied within a reasonable time. Whatever period that may encompass it has long since passed.
70. It follows that even if, contrary to my primary conclusion, Global have real prospects of establishing that the Alleged Contract was made, in my judgment they have no real prospects of establishing that the Conditions were satisfied and I consider that the judge was wrong to conclude otherwise.

Conclusion

71. For the reasons outlined above, I conclude that Aabar should succeed on the appeal on all three issues. In my judgment the appeal should accordingly be allowed and judgment entered for Aabar.

Lord Justice McFarlane

72. I agree.
ADDENDUM

THE OFFER LETTER

The Offer Letter was signed on behalf of Mr Maud and Global and provided that:

"WITHOUT PREJUDICE – SUBJECT TO CONTRACT

Dear Sirs

Offer to purchase all rights and claims of Aabar in relation to Marme and Edgeworth

This letter sets forth the key terms of an all-cash offer (the "Offer") to Aabar Investments PJS, Aabar Block S.à r.l. and any relevant affiliates of Aabar Investments PJS or Aabar Block S.à r.l. (jointly referred to as "Aabar") to purchase all of Aabar's rights and claims in relation to I) Marme Inversiones 2007 S.L. ("Marme") and its holding companies (together the "Marme Group") and II) EdgeWorth Capital (Luxembourg) S.à r.l. and Edgeworth Capital Limited and any and all of their affiliates and/or related parties (jointly "Edgeworth") (the "Proposed Transaction").

Glenn Maud together with Madison Realty International ("Madison") and Global Asset Capital ("GAC") or an entity designated by them will be jointly referred to as the "Purchaser".

1. Key commercial terms of the Offer to Aabar:

Purchased Rights	All of the rights and benefits of Aabar in relation to or in connection with the Marme Group, including
	i) all rights and benefits of Aabar under the Finance Documents as defined in the credit facility agreement (the "Junior Facility Agreement") entered into by Ramblas Investments ("Ramblas") on 12 September 2008 (the "Junior Claims");
	ii) all rights and benefits of Aabar under the Finance Documents as defined in the personal loan agreement entered into with Derek Quinlan and Glenn Maud on 12 September 2008 (the "Personal Claims");
	iii) all rights and benefits of Aabar under any and all arrangements with Derek Quinlan in relation to the Marme Group or otherwise, including any rights to acquire all or a part of the shareholder loans and shares held by Derek Quinlan in Ramblas;
	iv) any and all rights of Aabar against (other) third parties in connection with the acquisition of the Junior Claims from the Royal Bank of Scotland PLC in 2010 and/or representations and/or warranties made in relation thereto; and
	v) all rights and benefits that Aabar has against Edgeworth and/or any of its affiliates or related parties, including any and all rights and benefits under any loans that Aabar has made to Edgeworth and/or any of its affiliates or related parties;
	vi) the right to purchase the shares in the Aabar entity or Aabar entities that hold the rights listed at i) — v) above for an additional purchase price of EUR 1.-
	(all jointly referred to as "Aabar's Rights").
Purchase Price	The aggregate Purchase Price for Aabar's Rights shall be EUR 250,000,000

2. Other conditions

Release	Upon completion of the Proposed Transaction the parties shall provide each other with appropriate waivers and releases
Closing	The Proposed Transaction shall complete within 5 business days from acceptance of this offer
Conditions	(i) Subject to limited legal due diligence the results of which are satisfactory to the Purchaser
	(ii) Subject to contract

We hope that the proposed terms are acceptable to you and are available at your convenience for a meeting to further discuss the Proposed Transaction.

We look forward to hearing from you."

THE 9 MAY LETTER

The 9 May Letter was signed by Mr Maud and another and provided that:

"Date: 9 May 2015

Dear Sirs

RE: Purchase of all rights and claims of Aabar in relation to Marme and Edgeworth

We refer to our prior discussions and negotiations, and our history of seeking to work constructively together to resolve all matters that exist between us. This letter sets forth the key terms of a financed agreement (the "Agreement") with Aabar Investments PJS, Aabar Block S.à r.l. and any relevant affiliates of Aabar Investments PJS or Aabar Block S.à r.l. (jointly referred to as "Aabar") to purchase all of Aabar's rights and claims in relation to i) Marme Inversiones 2007 S.L. ("Marme") and its holding companies (together the "Marme Group") and ii) Edgeworth Capital(Luxembourg) S.à r.l. and Edgeworth Capital Limited and any and all of their affiliates and/or related parties (jointly "Edgeworth") (the "Proposed Transaction").

Madison International Realty ("Madison"), Global Asset Capital ("GAC") and Glenn Maud ("GM") or an entity designated by them will be jointly referred to as the "Purchaser".

1. Key commercial terms:

Purchased Rights	[text in materially identical terms to the text of the Offer Letter]
Purchase Price	[text identical to the text of the Offer Letter]

2. Other terms

Release	Upon completion of the Proposed Transaction the parties shall provide each other with appropriate waivers and releases of all outstanding matters, litigation and disputes between them including (without limitation) appropriate releases and waivers being granted by Glenn Maud
Expiry	This letter will expire at 6.00 p.m. London time on 11 May 2015, unless accepted by you by that time
Edgeworth	It is our intention post-completion to work constructively with Edgeworth and to refinance the existing senior debt to ensure Marme's future solvency. Any amendment to the arrangements that exist between you and Edgeworth that might be necessary shall be subject to mutual discussion and agreement.
Documentation	Upon your agreement that you are willing to proceed with the Proposed Transaction we will provide market standard documentation for the transfer of Aabar's Rights for your review.
Closing	The Proposed Transaction shall complete as soon as practicable upon agreement of final documentation.
Exclusivity	Upon your agreement that you are willing to proceed with the Proposed Transaction each party agrees that it will not pursue or seek to pursue any alternative transaction with respect to Aabar's Rights for 15 days from the date of this letter. During the Exclusivity period all litigation between the parties and any of them is to be stayed.
Expenses	Each party shall bear its own costs.

3. Conditions

This Agreement is subject to:

	(i) agreement of final form documentation to be governed by Loan Market Association ("LMA") terms and conditions;
	(ii) completion of limited legal due diligence the results of which are satisfactory to the Purchaser;

4. Funding

We enclose confirmation of the funding position from our financiers. We would be happy to provide any further information at your request. Our financiers are available to meet, if required, at short notice.

We hope that the proposed terms are acceptable to you and are available at your convenience for a meeting to further discuss the Proposed Transaction.

We look forward to hearing from you."

THE 9 MAY FUNDING LETTER

The 9 May Funding Letter provided that:

"We refer to the attached letter sent by Global Asset Capital Inc. ("GAC"), Madison International Realty ("Madison"), and Mr. Glenn Maud ("GM") to Aabar Block S.à r.l. (together with any relevant affiliates, "Aabar") relating to a proposed purchase (the "Acquisition") of all of Aabar's rights and claims in relation to (i) Marme Inversiones 2007, S.L. and its holding companies (together, the "Marme Group"), and (ii) Edgeworth Capital (Luxembourg) S.à r.l. and Edgeworth Capital Limited.

Madison is currently investing on behalf of its fifth fully discretionary private equity vehicle, Madison International Real Estate Liquidity Fund V, LP, which has $825 million of aggregate commitments. Madison was founded in 2002 and manages approximately $1.8 billion of equity.

As you have requested, we are writing to confirm the intention of Madison, on behalf of certain funds managed by its affiliates, to provide the funding needed to complete the Acquisition. This funding is subject to the satisfactory completion of Madison's due diligence and to other customary conditions precedent, including the completion of all documentation to the satisfaction of Madison.

It should be understood that this letter does not, and is not intended to, create (under the laws of any jurisdiction) any contractual relationship or other obligation of any kind between any of Madison, GAC, GM and Aabar.

This letter is to be treated as strictly confidential and is delivered to you with the understanding that neither it nor its contents may be disclosed, directly or indirectly, to any other person other than:

(a) to your directors, officers, employees, agents and advisors, who are directly involved in the consideration of the Acquisition and who are made aware of these confidentiality obligations;

(b) upon the order or request of any court or administrative agency or as otherwise required by law or regulation; or

(c) with our prior written consent

This letter and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law."