The High Court in England has recently ruled on the question of whether, in the context of a proposed public takeover, the instructions given to a firm of lawyers to provide confirmations about the availability of funds to a third party were protected from disclosure in subsequent proceedings. Ruling that the instructions were privileged, Mrs Justice Moulder’s judgment provides a helpful recapitulation of how legal privilege may apply to communications involving lawyers and their clients in a transactional context.
The Dispute
The claims brought by Raiffeisen Bank International AG (“RBI”) arose out of the proposed takeover of Asia Resource Minerals plc (“ARM”) by Asia Coal Energy Ventures Ltd (“ACE”). The transaction at the heart of the dispute involved ACE purchasing the shares in ARM and certain loan assets which were held by RBI. PT Sinar Mas Multiartha TBK (“SM Multiartha”) provided financing to ACE in connection with the transaction and was represented by Ashurst LLP (“Ashurst”).
ACE and RBI entered into a sale and purchase agreement (the “SPA”) which contemplated an escrow arrangement under which the maximum amount due to the seller ($85 million) would be held in escrow and released on the satisfaction of certain conditions precedent. Read more.
