Post M&A Disputes: Recent Nordic Case Law, Especially Regarding Loss Calculation

Abstract

Arbitration is the main dispute resolution method used in Sale and Purchase Agreements (SPAs) between a buyer and seller concerning company shares or the asset itself. In recent years, especially in Denmark and Norway, several arbitral awards rendered have great importance outside the awards commented on.
           Post mergers and acquisitions (M&A) disputes can typically be divided into two main categories. The first category, earn-out disputes, concerns the seller’s entitlement to additional compensation in the future depending on the target company achieving certain results and will not be dealt with here. The article will instead focus on the second category, damage claims in case of breach of warranties.
           Loss calculation in awards occasionally seems to be handled less thoroughly than other parts of the case. Tribunals typically focus most of their attention on the liability question, at least on the basis of a review of awards and their reasoning. As post M&A disputes are mainly handled by arbitration, there is a shortage of publicly available case law, at least in Nordic countries, including case law regarding the way in which loss calculation after the breach of warranties in SPAs is carried out. 
           This chapter presents three post M&A awards, focussing on the issue of loss calculation. The tribunals’ thorough and solid analyses in these cases, especially regarding loss calculation, should be of interest to a wider audience. Several of these awards also focus quite intensively on the calculation aspects.