LOLG Wins Significant Judgment at the Court of Appeal in Tax Indemnity Dispute
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On February 16, 2023, the Ontario Court of Appeal affirmed a decision of the Commercial List in a major tax indemnity dispute involving a liability of more than 30 million Euros. Crawford Smith and Zain Naqi obtained judgment on behalf of the successful respondents. The case involved the interpretation of tax indemnities in a share purchase agreement for the sale of a mine in Finland. After the purchase agreement was signed, the purchaser Boliden, a leading Swedish mining company, was reassessed tens of millions in Euros in additional taxes and penalties by Finnish tax authorities arising out of a restructuring carried out by the seller, First Quantum Minerals, while it owned the mine. LOLG argued that the applicants were entitled to full indemnity. The Court of Appeal affirmed the decision below, finding no reversible error in the application judge’s decision. This case is an important development for the interpretation of common tax indemnities in commercial contracts.
Read the Reasons of the Court of Appeal: https://www.canlii.org/en/on/onca/doc/2023/2023onca105/2023onca105.html?autocompleteStr=boliden%20min&autocompletePos=3