Court of Appeal dismisses US investment bank's success fee claim in connection with the public offer of shares in Indian bank

The Court of Appeal has dismissed a claim by a US investment bank seeking to recover a success fee in relation to the public offering of shares of an Indian bank, finding that the scope of the engagement letter was limited to private capital financings: Cantor Fitzgerald & Co v YES Bank Ltd [2024] EWCA Civ 695.

The appeal turned on the use of a single adjective in the engagement letter, namely whether the word “private” in the phrase “private placement, offering or other sale of equity instruments” qualified only the word “placement” or also qualified “offering or other sale”. Both the High Court and the Court of Appeal held that the word "private" qualified the entire list.

The Court of Appeal found that this accorded with the ordinary meaning of the words used. If the parties had intended to capture all kinds of financing, public and private, the most obvious way to do so would be by a reference to "any sale of equity instruments", either without more or followed by an inclusive list. Although the Court of Appeal agreed with the claimant's argument that there is no firm grammatical rule that an adjective or determiner at the start of a list necessarily qualifies the entirety of the list, it concluded that this would be the natural assumption where (as in this case) there was nothing else in the list to suggest otherwise. That interpretation was also supported by other factors, including the contractual context.

The decision is an important reminder to all contracting parties to take care in drafting terms involving lists, so as to leave no room for doubt as to whether an adjective or determiner is intended to qualify merely one item or the entire list.

For more information see this post on our Banking Litigation Notes blog.