African Minerals Ltd v Renaissance Capital Ltd: Renaissance Capital v African Minerals CA ([2015] EWCA Civ 448) - DAC Beachcroft

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African Minerals Ltd v Renaissance Capital Ltd: Renaissance Capital v African Minerals CA ([2015] EWCA Civ 448)

Published 28 May 2015

African Minerals Ltd v Renaissance Capital Ltd: Renaissance Capital v African Minerals CA ([2015] EWCA Civ 448)


The case relates to fundraising arrangements between Renaissance Capital (“Renaissance”) and African Minerals Limited (“AML”) between 2008 and 2010 and the construction of the agreements entered into between the parties.

Investment bank Renaissance claimed AML repeatedly failed to honour a fee arrangement relating to such fundraising and issued a claim for recovery of a sum in the region of US$94m plus interest from AML.

The High Court initially found in favour of Renaissance and ordered that AML pay Renaissance the arrangement fee under an engagement letter dated 2008, which was subsequently amended by a further agreement in 2009.

AML appealed against the finding that Renaissance was entitled to a fee under the engagement agreement. Renaissance issued a cross appeal contending that the High Court Judge should have awarded it the sum of US$93.75m plus interest, rather than the US$29.9m plus interest that it was awarded.

Facts of the case

AML owned, through subsidiary companies, the right to develop and exploit mineral assets in Sierra Leone, including a large iron ore deposit called Tonkolili.

In 2008, Renaissance and AML entered into an agreement in an engagement letter where Renaissance was appointed as exclusive financial adviser to AML in connection with the proposed sale of the iron ore company.

The term of the agreement entered into in 2008 expired on 7 February 2009, and on 8 April 2009 a further agreement was made which amended the engagement letter.

The agreement between AML and Renaissance was terminated in September 2010 and in July 2011 AML signed an agreement with a company, not introduced by Renaissance, in relation to the sale of the iron ore company. Completion took place in March 2012.

Renaissance contended that it undertook a significant amount of work which assisted AML in raising a large amount of capital for the project. Renaissance sought its fees for assisting in the fundraising, which were not paid and accordingly, Renaissance brought a claim for its fees in respect of the sale.

Clause 4(a) of the amended agreement stated that if any sale was “consummated” within one year of any termination of the agreement, Renaissance would be entitled to its fees.

AML argued that in order for the sale to be “consummated” within the meaning of the agreements, it had to be completed and the sale had not completed prior to the expiration of the agreement between the parties.

The High Court judge found that the words “if any sale is consummated” meant that if the terms of an agreement for a sale were agreed before the term of the agreement expired then Renaissance were to be paid its fee. The High Court judge said that “consummated” had to mean “something that occurred prior to completion” and therefore found in favour of Renaissance (albeit for a lesser sum than sought).

The Court of Appeal Decision

The Court of Appeal focussed on the meaning of “consummated” and the contractual wording of the documents.

The Appeal Judges decided that it was understandable that the parties had used a word other than completion as they had given “completion” a special contractual meaning. The Judges also stated that the High Court Judge should have analysed the original agreement which also used the word “consummated”.

The Judges went as far as to say that there was no logical reason for the High Court Judge to find that consummation meant something that occurred prior to completion.

They found that Renaissance was only to be entitled to its fee if it introduced a purchaser who entered into a sale agreement within the relevant period, if it resulted in a sale, but was only to be entitled to a fee resulting from a sale to someone unconnected with the bank if the sale to that purchaser was actually completed during that period. The Court of Appeal decided that consummated meant the same as completion.

As the sale was not consummated within one year from the termination of the agreement between AML and Renaissance, Renaissance was not in fact entitled to the fee claimed.

Judges can sometimes get things wrong and the reputation of the English Court system is built on this happening rarely, but when it does, there is the right of appeal. The Court of Appeal in this case appears to have rectified the first instance Judge's error, but it can be the case sometimes that it takes an appeal to the Supreme Court to get a final and authoritative decision. The reputation of the English Courts to "get it right" will cause commercial parties to choose English laws and English Courts to determine their disputes.


Jonathan Brogden

Jonathan Brogden

London - Walbrook

+44 (0)20 7894 6290

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