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Archive for October, 2013

Friday 4 October 2013

MH Real Estate

Break Notices

It is a basic rule that any contractual or statutory requirement for the service of notices, must be strictly complied with. This is particularly important for a tenant wishing to exercise a break notice. In fact, it has been stated in case law that “if the [notice] clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate the lease.” Failure to effectively exercise a break can have a disastrous impact upon a tenant, with continuing liabilities to pay the rent, service charge and other outgoings on a property which the tenant no longer wishes to occupy. The effects are worse still if the tenant has moved into alternative premises.

Friday 4 October 2013

MH International

Marriott Harrison LLP continues to grow its international offering across all departments and below are some recent examples of Marriott Harrison LLP’s international work.

Corporate

The Corporate Department continues to advise on a large number of international transactions. This includes acting for:

  • a Brazilian multinational energy corporation on the closure of its ESEP Branch in London;
  • the Brazilian Aeronautical Commission in Europe on various cross border purchase contracts for the supply of goods and services to the Brazilian Air Force;
  • a global educational provider in connection with the creation of a new Luxemburg based schools fund;
  • a Seattle based technology company on further elements of the “Cut the Rope” mobile app game;
  • an individual from the Kingdom of Saudi Arabia in respect of the sale of a BVI company which was a special purpose vehicle owning property in London;
  • iconic Brazilian Fashion Designer, Daniella Helayel on her departure from Issa London Limited;
  • a private equity house on obtaining Sharia compliant acquisition finance from The Bank of London and The Middle East plc in relation to the purchase of a neuro-rehabilitation business;
  • a private equity fund in its secured borrowing arrangements with a German investor;
  • the sellers of an English company specialising in IT cloud solution Google applications to a venture capital backed purchaser incorporated in Delaware;
  • an oil and gas exploration company on its listing on the AIM market. The company has key assets in Oman, Zambia and Namibia and the offer document was made available to investors in the U.A.E.;
  • the selling management on the sale of a well known coffee brand company to a major Swedish coffee roaster;
  • a long standing venture capital fund client on its sale of the largest owner of digital rights in the U.K. to a Swedish media firm; 
  • A BVI holding company in its mezzanine fundraising with investors based in Gilbraltar, South Africa and the U.K.

Commercial and Media

The Commercial and Media Department has advised:

  • a British rock band in connection with a breach of contract dispute regarding a performance cancellation in Nepal;
  • a long standing, independent film making client on its international distribution of movies;
  • an independent book publisher on a copyright infringement matter in Germany;
  • an Israeli online technology company on various IP licences with a number of U.K. based archives;
  • a New York based nightclub on a passing off and trade mark infringement matter in the U.K.;
  • an AIM listed digital content provider in connection with a rights ownership dispute over its global classical music range;
  • the Nike Foundation on its ongoing Girl Hub initiative in Ethiopia; and
  • a U.K. based recording, repackaging, and rights distributor regarding its overseas licences.

Dispute Resolution

MH Dispute Resolution has been:

  • advising a well-known Japanese manufacturing entity on the effect of contractual hardship clauses;
  • advising a major Far East commodities trading company in respect of the recovery of a debt under a loan agreement which included an arbitration clause (the judgment in this matter, awaiting approval by the Judge, is expected to have a significant affect on the drafting of loan agreements); and
  • advising the French purchaser of a luxury yacht which burst into flames on its first major voyage.

Real Estate

The MH Real Estate Department has acted for:

  • a Malaysian Bank based in Kuala Lumpur, on its ongoing secured lending transactions in the U.K.

Employment

The MH Employment Department has acted for:

  • the Brazilian Embassy on a number of contentious and non-contentious matters.

Conferences and Events

In October 2013, Duncan Innes, Andrew Wigfall and Peter Curnock will be attending the International Bar Association conference in Boston, the world’s largest meeting of lawyers.

Hugh Gardner

MH Corporate

Friday 4 October 2013

MH Employment

Employment Law Changes

This summer has seen some radical changes in the ever evolving area of employment law.

Employment Tribunal Fees

For the first time claimants will have to pay fees to submit a claim and have a hearing at an Employment Tribunal. From 29 July 2013 claims relating to unpaid wages and redundancy payments  require an issue fee of £160 and a hearing fee of £230. Unfair dismissal, discrimination and whistleblowing claims will require an issue fee of £250 and a hearing fee of £950. Claimants on benefits and low incomes can apply to the Government for full or partial remission of fees. The assessment of each claimant’s means is likely to delay significantly the initial processing of claims. It may be many months before an employer knows whether a claim has been brought. The new fee regime has faced considerable public and political backlash and it remains to be seen what impact it will have on tribunal claims.

Unfair Dismissal Compensatory Limit

There has for many years been a statutory cap on the amount of the compensatory award that a tribunal can award to a claimant in a successful unfair dismissal claim. The cap is increased each year in line with inflation and is currently £74,200. The Government has for the first time introduced an additional cap of one year of a claimant’s gross pay. The cap is now the lower of the statutory amount of currently £74,200 or one year’s gross pay.

Compromise Agreements are renamed Settlement Agreements

Statutory compromise agreements have acquired a new name. From 29 July 2013 they became known as settlement agreements.

Pre-termination negotiations

The Government has also legislated for the without prejudice negotiations that often accompany a potential dismissal. From 29 July 2013 evidence of pre-termination negotiations between an employer and employee is inadmissible before a tribunal in unfair dismissal claims, unless there has been improper behaviour on the part of either party. This essentially extends the old rules on without prejudice communications. Previously, such communications would only be regarded as inadmissible in cases where there was a pre-existing dispute between the employer and employee. The new rules do not apply to automatic unfair dismissal, discrimination, harassment or breach of contract claims. This raises the question of whether the new rules will have any real impact in practice, given that unfair dismissal claims often also involve claims relating to discrimination and/or breach of contract.

Katherine de Souza

MH Employment

Friday 4 October 2013

MH Dispute Resolution

A picture is worth a thousand…pounds?

The possible perils of making use of photographs found on the internet are ably illustrated by the recent case of Jason Sheldon v Daybrook House Promotions Limited [2013] EWPCC 26 in which the Patents County Court (which has been renamed and reconstituted as the Intellectual Property Enterprise Court from 1 October 2013) gave judgment on a preliminary issue as to the appropriate measure of damages in a case of copyright infringement in a celebrity photograph.

 

Exclusive Jurisdiction Clauses

 The recent case of Euromark Limited v Smash Enterprises Pty Ltd [2013] EWHC 1627 (QB) once again shows the importance of ensuring that the terms of an agreement accurately reflect the intentions and wishes of the parties as, once the agreement is entered into, the parties will be bound by its terms. This case concerned a clause in an agreement that provided that the agreement would be governed by Australian law and that the parties submitted to the exclusive jurisdiction of the courts of Australia.

 

 

Friday 4 October 2013

MH Corporate

Are you ready to be bound?

 The recent case of Newbury v Sun Microsystems [2013] EWHC 2180 highlights the importance of including the words ‘subject to contract’ if you do not intend proposed terms of a contract to become binding.

 Against the background of negotiations to settle a dispute, on 03 June 2013, Sun Microsystems’ solicitors wrote the following to Newbury’s solicitors:

 “Our client is willing to settle the entire proceedings by paying the Claimant [Newbury] within 14 days of accepting this offer, the sum of £601,464.98 . . . such settlement to be recorded in a suitably worded agreement. This offer is open for acceptance until 5pm this evening . . .”

The same day, Newbury’s solicitors wrote a letter of acceptance:

 “We thank you for your letter dated 03 June 2013. We are instructed that the Claimant [Newbury] accepts the terms of your client’s offer . . .We will forward a draft agreement for your approval on Tuesday 04 June.”

 A dispute arose about the form and substance of ‘such settlement to be recorded in a suitably worded agreement’. In particular, Sun Microsystems wanted the ‘suitably worded agreement’ to both modify and supplement the terms set out in their 03 June 2013 letter.

 

It’s good to have faith

 The recent case of Yam Seng PTE Ltd (“Yam Seng”) v International Trade Corporation Ltd (“ITC”) [2013] EWHC 111 (QB) provides a little hope for those seeking to rely on an implied duty to act in good faith in a commercial contract.

 It is generally accepted that English courts will uphold an express term of a contract which requires the parties to act in good faith towards one another. However, under English law there is no general duty to perform contracts in good faith where such a duty is not written down in the contract.

 The Yam Seng case concerned a distribution agreement for fragrances and toiletries bearing the brand name “Manchester United”. ITC granted Yam Seng the exclusive right to distribute the products in Hong Kong, Macau and parts of mainland China. Yam Seng and ITC were two companies each being controlled by one main individual.

 

Is your business ready for the B2C VAT changes?

 In a little over 13 months, businesses that sell e-services (telecoms, broadcasting and “electronically supplied services”) to non-business consumers within the European Union (B2C) will experience a dramatic change in VAT.

 On 1 January 2015, legislation comes into force which will change (i) the place of supply and (ii) the country of taxation of e-services, from the country in which the supplier is established to the country in which the consumer is resident.

 

Sleeping Partners and National Insurance Contributions (NICs)

On 4 April 2013, HMRC announced an adjustment in its view of the status of sleeping partners and inactive limited partners regarding National Insurance Contributions (“NICs”).

Historically, sleeping and inactive limited partners who took no active part in the running of the business, and simply acted as investors who sought to make a return on their investments, were not liable for Class 2 and Class 4 NICs as their income was treated as unearned income. HMRC now considers both sleeping partners and inactive limited partners to be liable (and to have been liable in the past) for:

  • Class 2 NICs as ‘gainfully employed’ self-employed earners; and
  • Class 4 NICs in respect of their taxable profits.

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