High Court dismisses summary determination of deceit claim based on draft disclosure letter

25/03/25

Veranova BidCo LP v Johnson Matthey PLC and others [2025] EWHC 707 (Comm)

The Commercial Court has dismissed an application for summary determination of whether actionable representations could be found in a draft disclosure letter sent in the course of negotiations for a large M&A transaction. The Defendants sought summary judgment of a £117.3 million deceit claim on the basis of the principle in Idemitsu Kosan Co Ltd v Sumitomo Corp [2016] EWHC 1909 (Comm) that warranties and draft warranties are merely contractual promises and do not, without more, amount to actionable representations. The Defendants argued that this principle extended to a draft disclosure letter and that the function of the draft disclosure letter was only to provide content to the warranties, not to provide representations.

The Claimant successfully argued that there is no legal principle which would justify a summary dismissal of a misrepresentation claim on the basis that a draft disclosure letter could not give rise to actionable representations. The Court held that there was no basis for finding at summary determination that the rule in Idemitsu could be so extended and held that the function of the draft disclosure letter in this case could also be to impart information, which could form the basis of actionable representations.

The judgment is here.