In Dodika v United Luck Group Holdings Ltd [2020] EWHC 2101 (Comm) (31 July 2020) the High Court held that written notice of a tax claim under a tax covenant was invalid because it did not comply with the contractual provisions of the sale and purchase agreement (SPA). The SPA required the buyer to provide reasonable detail of: the matter giving rise to the tax claim; the nature of the tax claim; and the amount claimed.
The High Court found that the ‘matter giving rise to the claim’ referred to the facts events or circumstances in which the claim is based (the factual basis of the claim). The notice given referred to a tax investigation being carried out by the tax authority and did not provide this detail. The sellers’ representatives were aware of the tax investigation but the court held...
