Mr Justice Hamblen has today rejected an attempt by Credit Suisse to obtain summary judgment on its claim for HK$234m (£17.9m) under a put option for the purchase of convertible loan notes. The First Defendant, Up Energy Group Limited, had granted the option to Credit Suisse in relation to notes issued by Up Energy’s Hong-Kong listed subsidiary (“Listco”). Credit Suisse had purchased the notes from Up Energy in March 2011 and in April 2013 exercised its option to require Up Energy to repurchase them. Up Energy’s obligations were guaranteed by the Second Defendant, its CEO, against whom Credit Suisse also sought summary judgment.
Hamblen J accepted that the Defendants had an arguable defence based on mutual mistake, the evidence indicating that neither side had foreseen that Up Energy’s status as a “connected person” of Listco would prohibitthe repurchase of the notes as envisaged by the put option. CreditSuisse argued that the put option could still be performed if an unconnected third party purchaser were found and that risk in relation to the connected person problem had in any event been allocated contractually to Up Energy. Hamblen J concluded in relation to both these arguments that the interpretation of the put option was not so clear cut and would require reference to factual matrix evidence. As to the position of the Second Defendant as guarantor, he had a “very real prospect” of showing that if the put option was void as against Up Energy then there was no separate claim against him.
Andrew Fulton acted for the Defendants (instructed by Clyde & Co)