In the case of Takeda Pharmaceutical Company Limited v Fougera Sweden Holding 2 AB [2017] EWHC 1995 (Ch), the High Court held that the seller of shares in a company was not subject to an express or implied obligation under the terms of the relevant sale and purchase agreement (SPA) to provide information to the buyer following completion.


Indemnities are often used in share purchase agreements to address any specific areas of risk identified by the buyer such as unresolved litigation and tax liabilities, so that those risks continue to be borne by the seller following completion. If that risk then results in a loss to the buyer, the seller will be required to compensate the buyer for the defined loss or damage arising from that specific matter.

Implied terms are terms that have not been expressly agreed by the parties but are implied into the contract by the court. Terms can be implied on a number of bases, including the intentions of the parties when they entered into the contract.

When interpreting a SPA, the court will consider the objective wording of the language, considering the factual background known or which was reasonably available to the parties at the time of the agreement, excluding prior negotiations.


In this case, the seller sold their entire issued share capital of a pharmaceutical company incorporated in Denmark (Target) to the buyer under the terms of a SPA.

When the SPA was agreed, there was an unresolved issue as to whether the Target was liable under Danish law for withholding tax on interest accruing on monies the seller had loaned to the Target.

In December 2010, the Danish tax authority had issued an assessment indicating that the Target should have paid tax on the interest. The Target appealed against this decision on the basis that several of the investors in the Target were resident in countries which had concluded tax treaties with Denmark. The appeal was still outstanding when the transaction between the buyer and seller completed. The Target had arranged for KPMG to collect information with respect to the investors but this was not shared.

The SPA included an indemnity, along with a conduct of claim provision and a further assurance provision. The information held by KPMG was specifically referenced in the SPA and that KPMG was holding such information on a strictly confidential basis.

Following completion, the buyer wrote to the seller requesting additional information with respect to the investors. The seller refused to disclose said information and as such the buyer issued proceedings.

The buyer argued that the SPA imposed obligations on the seller, those obligations arose from the further assurance provision together with the indemnity in the SPA, or because they were implied terms of the SPA.

The court considered two preliminary issues:

  • Was the seller obliged under the express and/or implied terms of the SPA to provide the information?

  • Was seller obliged under the express and/or implied terms of the SPA not wrongfully to interfere with, impede, hinder or obstruct efforts to obtain or procure the information?


The SPA did not contain an express clause requiring the seller to provide the specific information to the buyer. The court did not accept the buyer’s submission that the seller had a duty to co-operate by providing information to the seller, or not to delay or impede its provision.

With reference to the further assurance, there was no primary obligation on which a further assurance obligation could be founded.

It was deemed unnecessary to imply a co-operation obligation to render the SPA workable. Furthermore, there was no room to imply such a term when other co-operation obligations were covered in the SPA.

Implying the terms the buyer had argued for was not necessary to judge the SPA workable.


The case shows the difficulties in persuading the courts to imply terms in an agreement that has been professionally drafted on behalf of sophisticated parties. It acts as a reminder that careful consideration must be given to any matters which involve the parties co-operating after completion. Express terms in the SPA should therefore make it clear on the terms of that co-operation to avoid any disputes.

If you are considering selling your business, or are involved in a dispute as a result of a business sale, please get in touch with Farleys’ corporate and commercial solicitors on 0845 287 0939 or email us.