Case No: 2012 Folio 1398
Neutral Citation Number: [2014] EWHC 2863 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 21/08/2014

Before:

MR JUSTICE BLAIR
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Between :

	Starbev GP Limited	Claimant	
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	Interbrew Central European Holdings BV	Defendant	

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Lord Grabiner QC, Simon Colton, Nehali Shah (instructed by Allen & Overy LLP) for the Claimant
Ali Malek QC and Richard Brent (instructed by Skadden, Arps, Slate, Meagher & Flom (UK) LLP) for the Defendant

Hearing date: 13 June
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Judgment
Mr Justice Blair : 
1.	The court has now to give rulings consequential on the judgment in this case, which is set out at [2014] EWHC 1311 (Comm).  I need not recapitulate the facts which are set out there.  To avoid cluttering the text, where appropriate I have set out the references to the judgment in footnotes.  The issues I have to decide are as follows.
(1) Breach of warranty point
2.	This has to do with Issue 3 of the four issues I decided at trial.  This claim is pleaded on both sides as a claim for declaratory relief.  Prior to oral closing arguments, I asked both parties to submit the text of the declarations they were seeking, which they did.  I found in favour of ICEH on Issue 3, which is the anti-avoidance issue, and concluded that ICEH is entitled to the declarations which it seeks in that respect.
3.	Starbev argues that to give effect to the court’s judgment, the declaration should read differently.  In essence, it argues that the amount deemed to be an Equity Return on 18 June 2012 should be limited to exclude potential breach of warranty claims together with the upside on the Note linked to the Molson Coors share price.  According to Starbev’s calculations submitted at this hearing, this potentially has a significant effect, reducing the amount due from about €129m to about €74m.
4.	The factual basis of Starbev’s contention was not explored at trial, but is relatively straightforward.  Its skeleton argument refers to section 8 of the Note, sections 22.3 and 7.9 of the Share Purchase Agreement, and sections 3 and 16.2 of the Management Warranty Deed.  The latter agreement was not in the trial bundles, but was produced for this hearing.
5.	Starbev says that:
(1)	the effect of those provisions is that it was agreed between Starbev and Molson Coors that:
a)	Starbev’s aggregate liability for Claims under the Share Purchase Agreement was limited to €100m (save for breach of clauses 5.13 or 7.7), and Starbev’s aggregate liability in respect of all Deed Claims was, under the Management Warranty Deed, limited to €50m. 
b)	Molson Coors was thus entitled to withhold the total amount of  €150m in respect of warranty claims. 
(2)	Further, the warranty claim period under both the Share Purchase Agreement and the Management Warranty Deed did not expire until 16 March 2013 (after the Investment Threshold stepped up in December 2012), and no amounts could become payable to Starbev under the Note before this date. 
(3)	Given the terms of the judgment, Starbev’s case is that the Note is only deemed to be an Equity Return on 18 June 2012 to the extent of 93.9% of €350m, given that:
a)	93.9% is the portion of Starbev held by the Investor; and
b)	as at June 2012, Starbev could not be certain of receiving any more than €350 million upon redemption of the Note, given: (i) the €150 million escrow element; and (ii) the uncertainty over any upside.
(4)	Starbev cannot be deemed to have received in June 2012 any upside on the Note by reference to the developing share price of Molson Coors. Nor can it be deemed to have received in June 2012 the €150m, given that Molson Coors was entitled to withhold that sum. 
(5)	As recorded in the judgment at paragraphs 52 and 54, when Starbev in due course exercised its option under the Note on 13 August 2013, Molson Coors initially withheld €44m for alleged breach of warranty. Some of this amount was subsequently released following a partial settlement. Of course, the amount in fact withheld by Molson Coors when the Note was put could not have been known in June 2012 when the sale to Molson Coors was agreed and the Note was issued.
(6)	 In the premises, and given the acknowledgment in the judgment at paragraph 270 that the declarations “have to and do take account of what was eventually agreed between Starbev and Molson Coors in respect of the breach of warranty claims as reducing the proceeds of the Note”, the appropriate declaration as regards Issue 3 should be:
“Both the re-sale by the Claimant to Molson Coors Holdco-2 Inc (“Molson Coors”) of the Central and Eastern European business of the Defendant (“the Re-Sale Transaction”) and the €500 million Zero-Coupon Convertible Bond (“the Note”), issued by Molson Coors on 15 June 2012 to the Claimant as part consideration for the Re-Sale Transaction, were structured with the purpose of reducing payments due to the Defendant within the meaning of clause 4.4.3 of the CVR.
Accordingly, the Investor’s share of €350 million of proceeds from the Note is deemed to be an Equity Return occurring on 18 June 2012 for the purpose of determining the Internal Rate of Return, whether the Investment Threshold has been exceeded and whether an Excess Return Payment is required (all as defined in the CVR) in relation to the Re-Sale Transaction”
6.	In seeking to support its position, Starbev argues that it is appropriate as a matter of principle to deal with the form of a declaration in the light of the judgment given.  The judgment records that, “I accept … that a sum to cover possible claims for breach of warranty would have been withheld under escrow arrangements if the Note had not been part of the structure of the transactions.  The declarations sought by ICEH have to and do take account of what was eventually agreed between Starbev and Molson Coors in respect of the breach of warranty claims as reducing the proceeds of the Note”.  The declaration sought by ICEH fails (Starbev submits) to take account of what was agreed between Starbev and Molson Coors in respect of the breach of warranty claims in the sections of the various agreements that I have referred to above.
7.	In response, ICEH says that the passage Starbev quotes from the judgment was not looking at anything that was agreed as at June 2012, but to what actually happened afterwards in relation to the proceeds.  It refers to paragraphs 232-235 of the judgment which conclude that, “… ICEH is correct in its construction of the deeming provisions in the CVR.  Though nothing was in fact received in June 2012, what was received later is deemed to be received then if [the anti-avoidance provisions] otherwise apply”.  Whilst, of course, the form of a declaration may best be determined following judgment, this is on the basis of the contentions advanced at trial.  In fact, this is a new contention by Starbev advanced for the first time after judgment.
8.	I have no doubt that ICEH is correct in this regard.  At trial, Starbev’s arguments about breach of warranty were that, had there been no Note, it would have been obliged to retain in excess of €150m against the need to resolve any warranty claims.  The argument sought to be advanced is that the potential breach of warranty liability should reduce the amount of the deemed Equity Return by €150m, which Mr Ali Malek QC for ICEH accurately described as a “new third limb” to Starbev’s argument.
9.	ICEH objects to the admission of this argument at this stage, and the question I have to decide is whether Starbev should be permitted to do so.  The relevant considerations appear to me to be as follows:
(1)	Though there is jurisdiction to admit further contentions because no order has yet been made, the established grounds for re-opening a judgment (mistake etc.) do not apply here, and finality is important.  This is ICEH’s submission, and it is weighty.
(2)	On the other hand, the argument now sought to be advanced was always there to be made (and its factual premise was adverted to in the judgment).
(3)	Crucially, as I understand it, the points set out in Starbev’s skeleton argument for the hearing of consequential matters dated 12 June 2014 set out above do not open up a new factual enquiry.  I do not think that there is any dispute about the terms or effect of the sections of the agreements that Starbev identifies as being relevant above.
(4)	There are two factual issues which Starbev does raise.  It says that the reference in the judgment to Mr Szőke’s evidence that it was agreed with Molson Coors that the escrow amount would be limited to €50m does not take account of the €100m under the Sellers Warranties in the SPA.  If correct, I do not think anything turns on this.  Starbev also says that the amount which Molson Coors ultimately withheld in respect of breach of warranty was not “agreed” by Starbev.  I think that this is correct, and that the deductions made by Molson Coors were unilateral rather than agreed, but this does not affect anything the court has to decide.
(5)	ICEH is clearly prejudiced in the sense that, if admitted, this argument has the potential of substantially reducing its recovery, but no other prejudice is suggested.  It can and has set out what it says is the answer to the new argument.
(6)	There has been a degree in which the points being argued by both parties under the anti-avoidance head have emerged late: see paragraph 171 of the judgment in this respect.
10.	Taken as a whole, I have concluded that Starbev should be permitted to argue the point as set out in its skeleton argument dated 12 June 2014 as set out above notwithstanding that it does so after the giving of judgment.  Otherwise, the whole picture will not be adjudicated on, which would not be desirable in my view.
11.	As indicated, Starbev’s point is as follows.  The agreements between Starbev and Molson Coors when the sale of the business was concluded in June 2012 were to the effect that Molson Coors was entitled to withhold up to €150m upon redemption of the Note in respect of breach of warranty claims.  As at June 2012, therefore, it could not be certain of recovering any more than €350m upon redemption of the Note, and (it submits) cannot be deemed to have received any more than this (including any upside by reference to the Molson Coors share price).  The result is that only €350m of the proceeds of the Note is deemed to be an Equity Return occurring on 18 June 2012.  As it was put in oral argument, it was what was agreed with Molson Coors that counts, not what actually happened afterwards.
12.	ICEH says that the €150m represents Starbev’s maximum possible, i.e. its potential, not its actual, exposure to warranty and damages claims, an exposure that Starbev never suffered.  The court was right to conclude that ICEH’s proposed declaration takes into account the actual reduction in the value of the Note as a result of the warranty claims.  This is because only the actual “proceeds” of the Note as in fact distributed to CVC are captured by it, not the notional value of the Note before the set-off that did occur.  Taking into account only the actual deductions made by Molson Coors for warranty claims is consistent with the court’s finding that the application of the relevant clause of the CVR is intended to be an “arithmetic exercise”.  This conclusion follows from the fact that in the event that the parties are unable to agree how the transaction is to be reflected in any calculation, the CVR provides that the dispute is to be referred to a firm of accountants.  On the basis that the proceeds of the Note are deemed to have been received on 18 June 2012, what Starbev is seeking is a further deemed, but conditional, set-off against the deemed receipt.
13.	My conclusion on this issue is as follows.  The question is the extent to which the proceeds of the Note are deemed to be an Equity Return occurring on 18 June 2012.  The amounts actually deducted by Molson Coors from the proceeds of the Note in respect of breach of warranty claims are set out in the judgment and are not in dispute.
14.	Nothing was actually received by Starbev on 18 June 2012 in respect of the Note.  The first redemption date was 14 March 2013, by which time the threshold for payment to ICEH under the CVR had stepped up.  The effect of the Note was to defer payment of €500m with the dominant purpose (as the court found) of reducing the payment due to ICEH.  The present issue essentially is whether the deemed proceeds under the anti-avoidance provisions should be the amount of the Note less the maximum amount which could have been withheld by Molson Coors in respect of breach of warranty claims, albeit in fact not withheld (Starbev’s case), or whether the deemed proceeds should reflect what was in fact withheld (ICEH’s case).
15.	As regards anti-avoidance, clause 4.4.1 provides that it was “… the intention of the parties hereto that [ABI/ICEH] shall be entitled to participate in the return, whether directly or indirectly, of Cash proceeds received by the Investor as derived from the Relevant Interests on the basis set forth in this Agreement”.  In this regard, it is not in dispute that ICEH takes its calculations from Starbev’s 17 January 2014 notification of the amount due to it under the CVR.  In the notification, Starbev deals both with the deductions made by Molson Coors in respect of alleged breach of warranty, and the €10m that was eventually realised in respect of the uplift in the Molson Coors’ share price (paragraph 3 of the accompanying letter).
16.	I prefer the submissions of ICEH on this point.  The deemed Equity Return in my view is calculated by reference to the amount of the Note less what was withheld by Molson Coors, not by reference to the upper limit of what could have been withheld by Molson Coors.  I consider that the deeming provision in clause 4.4.3 applies to the payments to the Investor (the CVC Funds) in respect of the Note when it was redeemed.  It is (in summary) the actual rather than the potential position that applies.  It follows that although I have allowed Starbev to argue this point, I do not think that it is correct.  Paragraph 272 of the judgment accordingly stands, and ICEH is entitled to the declarations set out at paragraph 184 of the judgment.
(2) Calculating the double recovery exclusion
17.	This has to do with Issue 4 of the issues I decided at trial.  Issue 4 is summarised at paragraph 273 of the judgment, and has to do with the calculation of the Excess Equity Return.  In broad terms, the issue is whether proceeds received by CVC at a time when there has been a “step-up” in the Investment Threshold remain subject to the lower threshold if the “Investment Amount” has been exceeded in a period covered by the lower threshold.  ICEH says that the lower threshold applies, whilst Starbev says that the higher threshold applies.  The issue arises if the threshold was exceeded in the earlier period.
18.	This issue does not arise on the conclusions I have reached in my judgment.  It would have arisen if I had found for ICEH on the first issue (see the explanation in paragraph 70 of the judgment).  It would also have arisen if I had found for Starbev on the “breach of warranty” point discussed earlier in this judgment.  (This is because on Starbev’s argument, which I have rejected above, only €350m of the proceeds of the Note are to be treated as received in June 2012, the balance coming in after the threshold stepped up on 2 December 2012.)
19.	Since the issue does not arise, ICEH submits that no practical benefit will be served by making a declaration.  Starbev, on the other hand, says that the parties are in dispute on the issue, which would become relevant in the event of a successful appeal on Issues 1 or 3.
20.	In its skeleton argument for the consequential hearings, ICEH says that “… the parties’ post-judgment correspondence has revealed the existence of a further construction issue in relation to issue (4).  This was not debated before the Court during the trial.  This issue is how the proviso in the definition of Excess Equity Return in the CVR is intended to prevent double-recovery (i.e. how the words “(other than an Equity Return with respect to which an Excess Return Payment has already been made)” are to be understood and applied).  Accordingly, no declaration in any event ought to be granted without resolving this further issue”.
21.	This again, therefore, is a new point raised after judgment.  Starbev does not however object, and I consider that I should deal with it in case it should become relevant.  I also consider that a declaration should be granted according to the determination of this issue because there is a practical benefit in doing so.  Both sides have put in submissions and worked examples in support of their respective interpretations.  
22.	The question to be determined in the light of the court’s ruling on Issue 4 is essentially how credit is to be given where there has already been an Equity Return in respect of which an Equity Return Payment has already been made in circumstances where the Investment Threshold has since stepped up.  It is common ground that credit is required to be given by the terms of the definition of Excess Equity Return.  In its written submissions for trial, ICEH stated only that credit was to be given for proceeds received.  In its written submissions for trial, Starbev’s position was and remains (in substance) that credit should be given in the amount of the earlier Excess Equity Return (see the reference to €Xm in paragraph 106).
23.	Starbev’s case is that the proper approach in calculating Excess Equity Returns on a date after the Trigger Event is to: (i) calculate the Equity Returns to date; (ii) deduct any Equity Return with respect to which an Excess Return Payment has already been made; and (iii) compare the difference between that amount and the current thresholds (i.e. the IRR Threshold and the Investment Amount), with the excess over the higher threshold being the Excess Equity Return (and 40% of that Excess Equity Return being the Equity Return Payment payable to ABI/ICEH).  It asks the court to make a declaration in the terms it submitted prior to oral closings.
24.	ICEH’s case is that, given the court’s finding on Issue 4, since a calculation has to be made on the basis of the stepped-up threshold, an “Equity Return with respect to which an Excess Return Payment has already been made” (to quote from the definition of Excess Equity Return) ought only to be excluded where the previous Excess Equity Return has also been calculated on the same basis as the new stepped-up calculation.  If not, the comparison that will take place for the purpose of eliminating double-recovery will be an “apple and pears” comparison i.e. one undertaken on two different bases by reference to two different Investment Thresholds and therefore two different Excess Equity Returns.
25.	ICEH asks the court to make a declaration as follows:
“Where a further Equity Return accrues after the date on which the Trigger Event has occurred, the Excess Equity Return (if any) falls to be calculated as the total of all Equity Returns accruing on that date that is in excess of the Equity Return required for the Equity Return of the Investor to exceed both the IRR Threshold and the Investment Threshold at that date, excluding any part of the Excess Equity Return as calculated at that date in respect to which an Excess Return Payment has already been made.”
26.	ICEH says that: 
(1)	The relevant Excess Equity Return is to be calculated, for the purpose of avoiding double recovery, by reference to the thresholds prevailing as at the date when the later Excess Return Payment falls to be made i.e. “as of the relevant date of determination” (in the words of the definition). ICEH’s contention, therefore, is that, when calculating the Excess Equity Return, both the Equity Return and the deduction for the purpose of avoiding double recovery are to be assessed by reference to the two qualifying conditions, “(i) accruing, as of the relevant date of determination, on or after the date on which the Trigger Event has occurred and (ii) that is in excess of the Equity Return required for the Equity Return of the Investor to exceed both the IRR Threshold and the Investment Threshold. …”.
(2)	 ICEH’s interpretation has the effect of taking into account (retrospectively) any increase in the thresholds that determine what an Excess Equity Return is, so that only an Excess Equity Return calculated by reference to the prevailing Investment Threshold is deducted, thereby ensuring that ICEH is not paid twice “in respect of the same Equity Return” (to use Starbev’s formulation in paragraph 102(3) of its opening submissions).
(3)	Starbev’s interpretation, by contrast, has the effect of excluding from the calculation of Excess Equity Returns sums in respect of which ICEH has never previously received an Excess Return Payment. It has the further absurdity of providing returns to ICEH as if the higher Investment Threshold only ever had applied.
27.	 Starbev says that:
(1)	First, the words in parenthesis in the definition – “(other than an Equity Return with respect to which an Excess Return Payment has already been made)” – do not require any retrospective reinterpretation of the sort proposed by ICEH. They refer to what has in fact happened. For any Equity Return which has in fact been received in the past, either an Excess Return Payment has already been made, or it has not. Current or historic thresholds have nothing to do with the question.
(2)	ICEH’s construction contorts the wording of the definition, so as to treat the words “as of the relevant date of determination” as though they were applying to the words which refer to thresholds being exceeded. But that is not the natural or ordinary meaning of the words “accruing, as of the relevant date of determination”: this simply means that all Equity Returns to date should be included, up to the date of determination (which will – by definition – be “on or after the date on which the Trigger Event has occurred”).
(3)	This contorted reading of the definition is wholly unnecessary. Double recovery is avoided by Starbev’s much simpler, natural construction – where all previous Equity Returns with respect to which an Excess Return Payment has already been made are excluded from the calculation of future Excess Equity Returns.
(4)	If the parties had intended to have the effect for which ICEH contends, the definition could have read: “‘Excess Equity Return’ means any Equity Return (i) accruing, as of the relevant date of determination, on or after the date on which the Trigger Event has occurred and (ii) that is in excess of the Equity Return required for the Equity Return of the Investor to exceed both the IRR Threshold and the Investment Threshold (other than an Equity Return with respect to which an Excess Return Payment has already been made which would have been an Excess Equity Return if the current IRR Threshold and the current Investment Threshold had been applicable at that time).”
28.	My conclusion is as follows.  I have had regard to the worked examples on both sides, and also the “real” examples produced by ICEH (on a particular hypothesis which ICEH does not accept).  In my view, the strongest point in favour of ICEH’s interpretation is its contention that Starbev’s construction produces an outcome that the total principal payable to ICEH is the same – or almost the same – as if the threshold had always been 2.50x (as opposed to going up in steps to that level).  Although Starbev says that this is wrong, I agree with ICEH that its reasons for doing so are not clearly articulated.  I should state however that Starbev says with apparent force that ICEH’s approach also leads to anomalies (a point that was made in its opening submissions for trial as well as its worked examples at the consequentials hearing).
29.	I also accept that ICEH’s interpretation of the exclusion provision is not (as I initially thought) simply another way of re-running its case at trial on Issue 4.  On the other hand, ICEH’s interpretation (which Starbev says has changed, something which ICEH contests) is not straightforward (though I recognise that it necessarily begins from the court’s conclusion on Issue 4 with which it disagrees).  Its basic point is that (on the premise of the court’s conclusion) the calculation of the relevant Excess Equity Return must be by reference to the thresholds prevailing at the date when the later Excess Return Payment falls to be made, otherwise credit cannot properly be given where the Investment Threshold has previously been exceeded and the Investment Threshold has subsequently stepped-up. 
30.	Whether that is the correct interpretation depends on the construction of the exclusionary words in brackets in the definition of Excess Equity Return: “… (other than an Equity Return with respect to which an Excess Return Payment has already been made) … ” read in context.  ICEH denies Starbev’s assertion that its construction gives a “contorted” reading of the definition of Excess Equity Return, saying that “the most that could be said is that it requires the brackets in the definition to be ignored, albeit in the interests of adopting an interpretation that accords with the natural and ordinary meaning of the provision read as a whole and in the light of its agreed purpose”.  
31.	I would accept that the ICEH interpretation is not “contorted”, but to work it does as ICEH recognises require the removal of the brackets in the definition.  I do not agree that this is the natural reading of the provision.  On balance, I consider that Starbev is correct on this point, and that its interpretation is the one which accords with the language of the definition construed in context.  On its true construction, I consider that the words in parenthesis in the definition of Excess Equity Return in the CVR exclude Equity Returns with respect to which an Excess Return Payment has already been made, and that this is a factual question to be answered by reference to what has in fact happened.
32.	It follows that Starbev is entitled to a declaration in the form it submitted to the court at trial prior to oral closings, the terms of which are reflected in the judgment:   
“Where an Equity Return accrues on or after the date on which the Trigger Event has occurred, the Excess Equity Return (if any) falls to be calculated as the total of all Equity Returns accruing on that date, other than Equity Returns with respect to which an Excess Return Payment has already been made, that is in excess of the Equity Return required for the Equity Return of the Investor to exceed both the IRR Threshold and the Investment Threshold at that date.”
(3) Payment order
33.	Subject to giving the claimant sufficient time to call on the investors, and to the defendant giving proper security against the possibility of a successful appeal, it was not in issue at the consequentials hearing that the defendant should have an order for payment (transcript pages 60-65).  (The parties will have to agree the time and security points.)  On Starbev’s case on Issue 3 which I have rejected, my understanding is that it is common ground that the number is €74,155,701.61.  On ICEH’s case on Issue 3 which I have accepted, my understanding is that it is common ground that the number is €129,147,872.39.  On that basis, ICEH is entitled to a payment order in the latter amount. 
(4) ICEH’s claim for interest pursuant to contract or statute
The issue as to interest
34.	Both parties sought declaratory relief at trial.  The position of Starbev, which though claimant was potentially the paying party, was that nothing further was due to ICEH under the CVR.  The position of ICEH was that further sums were due under the CVR but these were not quantified, and there was no money claim pleaded.  This does not matter so far as the sum due is concerned, since the parties are agreed what is due on the premise of the findings that the court has made.  However, it has given rise to a substantial dispute in relation to interest. 
35.	There is provision in the CVR for submission of disputes to independent accountants, and ICEH says that it has not previously made a claim for interest because it says that it anticipated that, if interest was disputed, it would be resolved by this route.  Starbev disputes this, saying that the entitlement to interest depends on whether there is power to grant interest, and that accountants cannot award interest if (as Starbev says) there is no power to do so either pursuant to contract or statute.
36.	In any case, though interest was not raised as an issue at trial, ICEH seeks permission to amend post-judgment to claim interest, and has submitted a proposed amended Defence and Counterclaim supported by further submissions.  It seeks permission to claim interest on all sums due to it from 18 June 2012 at the contractual rate of three percent above one year euro LIBOR per annum, alternatively under s. 35A of the Senior Courts Act 1981 at the same rate. 
37.	Starbev submits that applying the well-known principles as to leave to amend, permission to amend to plead this claim for interest should not be allowed post-judgment, and that in any event, under the terms of the contract (the CVR) no interest is payable contractually, and for the same reason it is not payable pursuant to statute either.
38.	The contractual provisions are as follows.  The CVR provides in clause 10.5 that:
“If Starbev fails to pay any sum payable under this Agreement (howsoever determined) which is not disputed in good faith within 10 Business Days of its due date, the liability of Starbev shall be increased to include interest on such sum in Euros at the rate of three percent (3%) above one year euro LIBOR per annum from the date when such payment is due until the date of actual payment. Such interest shall be compounded on a daily basis.”
39.	The parties are in dispute as to the proper construction of this provision, and its application on the facts.  ICEH says that (when read with the provisions as to interest in the SPA which it says indicates that it was the intention of the parties that interest is to be payable where a party fails to pay a sum due), it would be contrary to business common sense to construe clause 10.5 of the CVR broadly as excluding the payment of interest to ICEH on the facts of this case.  On the contrary, a construction of clause 10.5 as providing for the payment of the specified rate of interest, other than in the limited exception where there is a good faith challenge to payment within 10 days of the due date, more accords with business common sense and the reasonable expectations of commercial people.
40.	Starbev says that interest is payable only where any sum payable under the CVR is not disputed in good faith within ten business days of its due date.  Clause 10.5 is not applicable in this case because the sum payable was, and is, disputed in good faith within the relevant period.
41.	ICEH says that the relevant date for this calculation is 18 June 2012, because that was when the Excess Return Payment was due and payable.  There was no dispute within ten Business Days of that date, whether in good faith or otherwise, as to Starbev’s liability to make payment to ICEH.  In these circumstances, ICEH is entitled to contractual interest, and nothing should be read into the clause to the effect that the ten day period only began to run when ICEH demanded payment.
42.	Starbev responds that there can be no “dispute” until ICEH contended that some further payment was due.  Otherwise, Starbev’s ability to challenge ICEH’s case in good faith, and thereby avoid liability for interest, would be lost even before Starbev was aware that there was a dispute.
43.	In that regard, there is a factual dispute between the parties.  It turns on the date of various letters passing between the parties.  ICEH points to its solicitors’ letter of 19 October 2012 which says that the deferral of a substantial proportion of the consideration for the Molson Coors sale was deliberately structured with the purpose of reducing the payments due under the CVR.  The letter asserts that ABI is entitled to a payment of at least €187m.  ICEH says that these assertions were not challenged within ten days.  Instead, on 24 October 2012 Starbev issued proceedings limited to seeking declaratory relief in respect of the meaning only of the “Investment Amount”.  On no view, therefore, it contends, was there a sum disputed within ten days. 
44.	Starbev says that ICEH first raised the possibility of the anti-avoidance provisions in a letter of 12 October 2012, to which Starbev replied on 16 October 2012 saying that, “for the avoidance of doubt, we entirely reject any suggestion that we have acted in any way that would breach the anti-avoidance provisions.  Any such allegation will be vigorously defended”.  The sum having been disputed in good faith within 10 Business Days, the liability of Starbev is not to be increased to include interest.
Discussion and conclusion as to interest
45.	Although it is usual practice to plead a claim for statutory interest, it is not a pre-condition to the court awarding it.  CPR 16.4(2) provides for certain matters to be included in the particulars of claim “if the claimant is seeking interest”, but these rules regulate the exercise of the court’s power to award interest under s. 35A of the Senior Courts Act 1981, and do not take it away (El Ajou v Stern [2006] EWCA Civ 165 at [34]-[39]).  Thus the court is not precluded from awarding interest pursuant to statute merely because a claim for interest is not pleaded.  I do not accept Starbev’s submission that this authority has been abrogated by Mitchell v News Group Newspapers [2013] EWCA 1537.  The two cases are dealing with different questions.
46.	However, a contractual claim for interest must be pleaded.  Where a contract provides for the payment of interest, the agreed terms will normally displace the court’s discretionary power to award interest under s. 35A Senior Courts Act 1981.  This is because the court respects what the parties have agreed as to interest rather than substituting its own discretion.  This is recognised in part by s. 35A(4), which provides that, “Interest in respect of a debt shall not be awarded under this section for a period during which, for whatever reason, interest on the debt already runs".   This means that, where the contract itself fixes interest, the court can only enforce that provision: its statutory power does not override the contractual provision, so that it cannot fix a different interest rate (Standard Chartered Bank v Ceylon Petroleum Corporation [2011] EWHC 2094 (Comm) at [10], Hamblen J).  What applies to interest rates also applies where the parties have agreed as to the circumstances in which interest is payable.  Where the parties have agreed that interest is to be payable in particular circumstances, or not payable in particular circumstances, the court will give effect to the parties’ agreement.  (Different considerations may apply post-judgment.)
47.	I do not think that a technical approach needs to be adopted as regards pleading contractual interest.  If the issue is simply as to the rate of interest, the fact that the agreed rate has not been pleaded may be of little practical consequence.  On the other hand, where there is a dispute of substance, it may be important for the dispute to be properly defined in the pleadings and dealt with at trial.  In the present case, there is no dispute that ICEH’s claim for interest requires to be pleaded.  As I have indicated, it has submitted draft re-amendments pleading its claim for interest.  As a matter of comment, these re-amendments are substantial, running to about three pages of pleading.  This was not, as was suggested in ICEH’s written submissions, a mere formality in the light of the judgment.  The question for the court is whether permission to re-amend should be given, in circumstances in which the trial is over.
48.	The principles are not significantly in dispute.  The court will consider among other things the explanation as to why the amendment is being made late, and the prejudice which will be caused to the respective parties by granting or refusing permission to amend (see e.g. Brown v Innovatorone  Plc [2011] EWHC 3221 (Comm) at [14]).  There is no dispute as to the adequacy of the proposed re-amendments as such, but there is a dispute as to whether they stand a real prospect of success, which is another relevant factor.
49.	I begin by addressing this factor.  In that regard:   
(1)	I do not accept ICEH’s submission that the court should start from the position that in a commercial transaction, it is to be inferred that the parties’ intention is that interest should be payable on late payments. The starting point, in my view, is that the parties expressly provided for interest in clause 10.5 of the CVR.  I do not think that the SPA is relevant in this regard.
(2)	I prefer Starbev’s submission that as a matter of construction, the effect of clause 10.5 of the CVR is that interest is payable by Starbev on sums which are not paid under the CVR within ten business days of their due date unless those sums are subject to a good faith dispute.
(3)	I further prefer its submission that as a matter of construction, the effect of clause 10.5 is that its liability to pay interest arises when it fails to pay a sum which has been “determined” to be payable.  That determination is the subject of these proceedings, and the sum payable has been determined by the decisions of the court.
(4)	I further prefer its submission that until ICEH raised the anti-avoidance argument, Starbev could not know that ICEH contended that some further payment was due, and there could be no dispute between the parties.  In this regard, I prefer Starbev’s analysis of the communications between the parties in October 2012 (see above).  The reality is that ICEH’s claim for further sums payable under the CVR has always been disputed.
(5)	I consider that Starbev is correct to submit that the contractual rate of 3 per cent above one year euro LIBOR is predicated on the absence of a good faith dispute.
50.	In summary, in my view Starbev has a strong case that clause 10.5 stipulates that interest shall be paid at the stated rate in circumstances which have not arisen, and that ICEH is not entitled to pre-judgment interest.
51.	I have also to consider Starbev’s submission that ICEH’s claim for interest could affect the disclosure to be given by the parties, and the witness evidence and other evidence to be adduced.  It submits that questions of fact may arise both as to the factual matrix which might affect the construction of the contractual terms, and in order to determine whether the factual requirements of the contractual term have been satisfied.
52.	Starbev relies on the following proposed amendments in particular:
(1)	“There was no dispute, whether in good faith or otherwise, within 10 Business Days of 18 June 2012, as to the liability of Starbev…” (proposed Re-Amended Counterclaim, para 66);
(2)	“The allegation made in [ICEH’s] solicitors’ letter of 19 October 2012 was not vigorously defended, whether in good faith or otherwise, within 10 Business Days of it being made” (proposed Re-Amended Counterclaim, para 69)
Starbev objects that there has been no disclosure or witness evidence on these issues, which would be required if they were to be disposed of fairly.  It submits that it would be prejudiced by the proposed re-amendments at this stage.
53.	ICEH responds that Starbev’s suggestion that it will suffer prejudice if permission to re-amend is granted because of the absence of disclosure and witness evidence is fanciful.  There are no factual issues to explore.
54.	I agree with Starbev in this respect.  If this detailed pleaded case was to be advanced, whether put as a claim for contractual interest or interest pursuant to statute, it should have been advanced so as to be considered at trial in the light of disclosure and evidence.  It is not in my view the kind of interest claim that can properly be raised after judgment.  Further, it is not the kind of claim which (as ICEH suggests) could properly have been left to determination by independent accountants under the provisions of the CVR, as is said to justify the fact that it has not been raised until now. 
55.	For all the above reasons, I refuse ICEH permission to re-amend its Amended Defence and Counterclaim.
56.	As to post-judgment interest, I do not think that there is any dispute that ICEH should have interest at a rate of 3 per cent above one year euro LIBOR on a simple basis.  That should run from the date I handed down judgment, namely 29 April 2014.
(5) Permission to appeal
57.	Starbev seeks permission to appeal the declaration made in respect of Issue 3 (anti-avoidance).  ICEH opposes that application, but if the court is minded to give Starbev permission, itself seeks permission to cross-appeal on the two construction issues (Issues 1 and 4).
58.	As noted in the judgment, the case raises difficult issues of construction upon which substantial sums depend, and I consider that the CPR 52.3(6)(a) threshold is satisfied.  I give both parties the permission to appeal which they have requested.  This decision is being handed down in August, and at the parties’ request, I direct that time for filing any notices of appeal be extended to 29 September 2014.
(6) Costs
59.	Starbev submits that there should be no order as to costs.  The original issues concerned the Investment Amount and the meaning of Excess Equity Return on which it was successful.  The anti-avoidance issue on which is succeeded was pleaded late.  Ultimately, each of the parties won on two out of the four issues.
60.	ICEH submits that it is clearly the winning party, entitled on the basis of the judgment to a further payment of €129m.  It recognises however that it was unsuccessful on two of the four issues, and that the court may be minded to make an order giving it a percentage of its costs (Grupo Hotelero Urvasco s.a. v Carey Value Added S.L. [2013] EWHC 1732 (Comm)).  In that regard, it submits that it lost on pure issues of construction, and won on the principal factual matters in dispute.  On that basis, any deduction should be no more than 10 per cent.
61.	As regards this latter point, Starbev agrees that if the court is minded to make an order of costs in favour of ICEH it should be on a percentage basis, and submits that the deduction should be 50 per cent.
62.	There is no doubt that ICEH is the overall winner, in my view, and that it is entitled to an order for costs.  Both parties effectively acknowledge that the appropriate order in those circumstances is that ICEH recovers a percentage of its costs to reflect the fact that it lost on two of the four Issues.  Despite the fact that the anti-avoidance claim was raised late, I consider that ICEH is correct to submit that most of the factual dispute at trial was generated by this dispute, and also the estoppel argument on which Starbev was also unsuccessful.  I consider that ICEH should have 75 per cent of its costs.  (This is not affected by the disposition of the consequential matters as set out in this judgment.)
63.	It is not disputed that ICEH should have a payment on account.  Its costs to 9 June 2014 are £1.616m as opposed to Starbev’s costs of £3.12m.  I shall order an interim payment of £640,000 (being approximately 50 per cent of 75 per cent of ICEH’s costs to 9 June 2014 with some allowance for costs incurred subsequently).
64.	It is not disputed that interest on costs should be awarded under CPR 44.2(6)(g), and the parties can agree the appropriate order in this respect.
65.	These are my rulings on the consequential issues.