Mind the gap: dealing with a delay between signing and completion
By Stephen Jarvis
On 26 May 2014, Rio Tinto, Chinalco and the World Bank’s International Finance Corporation announced a deal to develop Guinea’s iron ore deposits — potentially doubling Guinea’s GDP. According to the firms involved, the Simandou project will be the biggest combined iron ore and infrastructure project ever seen in Africa, with a value in the region of $20bn (£12bn).
The deadline for first production at Simandou is 2018, and the rail and port infrastructure will revert to the Guinea government after 30 years. Given the length of time taken from inception to delivery, major projects such as Simandou bring transaction risk to those involved. Those risks are not specific to infrastructure projects; they apply to a wide variety of transactions, including corporate sale and purchases. The transaction risk is summarised as follows: how should we provide for a ‘material adverse change’ (MAC) occurring before delivery or completion?
This note considers what a MAC clause is and when it is used, highlights recent case law and finally offers some tips for those involved in reviewing or negotiating MAC clauses…
Click on the link below to read the rest of the Ince & Co briefing.
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Briefings from Ince & Co
B Atlantic provides a good example of the courts’ approach to construing exclusions (with perhaps surprising outcomes) and in assessing whether a foreign court has acted perversely or by reason of political interference.
The ECJ has confirmed that the Brussels Regulation does not prevent a EU member state court from recognising and enforcing an anti-suit injunction granted by arbitrators.