Uitspraken

a. Tennor heeft het eerste indicatieve bod uitgebracht in september 2018 en het tweede bod in juli 2019 (met als bijlage een Term Sheet), steeds met het voorbehoud “subject to contract”.

b. De oprichter en voorzitter van de Raad van Commissarissen van Tennor ([oprichter van Tennor]) heeft de transactie in september 2019 gepresenteerd aan de “board”. Dit is via een adviseur medegedeeld aan [X].

c. Tennor heeft in november 2019 financiële informatie verstrekt aan [X] in verband met haar ruimte om de beoogde prijs te betalen. Tennor heeft in november 2019 een “accounting issue” gemeld waardoor “closing” nog niet kon plaatsvinden.

d. Tennor heeft bij e-mail van 14 november 2019 van haar raadsman een door haar ondertekende intentieverklaring (LOI) gestuurd en daarbij medegedeeld dat “the actual signing and closing would then occur on 18th February 2020. In the light of the above, the Transaction Agreement is now final from our perspective and reflects the content our client is prepared to agree on. Please find, therefore, the executed Cover Letter of Intent as an offer for your countersignature.”

e. Tennor heeft bij e-mail van 26 december 2019 van haar raadsman met betrekking tot de intentieverklaring medegedeeld: “Happy to confirm also for Tennor that drafts are final from our perspective.”

f. De intentieverklaring is enkele dagen later ondertekend door partijen. De strekking van de intentieverklaring is dat partijen voornemens zijn de transactie aan te gaan, maar ieder voor zich de vrijhoud behoudt om ervan af te zien. Indien een partij ervan afziet (of de transactie niet uiterlijk 18 februari 2020 aangaat, later verlengd naar 2 maart 2020), betaalt die partij een fee aan de wederpartij, aldus de intentieverklaring. In de intentieverklaring staat niets over

geschillenbeslechting. Wel is Nederlands recht van toepassing verklaard. In de intentieverklaring wordt verwezen naar de Transaction Agreement (waarin de beoogde transactie werd vastgelegd):

“We [X], [haar CEO], [haar mede-aandeelhouder] (and certain affiliates), and Tennor Holding B.V. ("Tennor") have discussed whether [X] may sell and transfer to Tennor or a fully owned subsidiary of Tennor all of the outstanding shares of [onderneming gelieerd aan gedaagde in het incident] and 50% of the outstanding membership interests in Global Champions Tour USA LLC ("GCT LLC"). In the light of this, [X], [haar CEO] and Tennor declare their non-binding intention to execute the transaction agreement as attached hereto as Anne[X] 1 on the 18th of February 2020 (the "Transaction Agreement") (…).”

g. De bestuurder van Tennor ([oprichter van Tennor]) heeft in een persbericht laten weten: “I look forward to working with [mede-aandeelhouder] to help build on the success of this fantastic global sports property. [Mede- aandeelhouder] has been the pioneering figure at the top level of show jumping for many years and I am delighted that Tennor will be part of that continuing journey and the exciting opportunities ahead.”

h. Partijen hebben de intentie uitgesproken medio februari 2019 te “closen”, maar de raadsman van Tennor heeft medio februari 2019 bij e-mail laten weten dat een paar weken uitstel nodig was omdat de vennootschap die zou kopen nog niet opgericht was (“AcquiCo is simply not operable”). De raadsman van Tennor heeft daaraan toegevoegd: “there is no reason why the transaction agreement could not be signed prior to the 2nd of March”. De woorden “subject to contract” komen in deze e-mail niet voor.

i. De raadsman van Tennor heeft bij e-mails van 2 maart 2020 laten weten: “The proposed changes are fine. If [raadsman van mede-aandeelhouder] is also fine, we would distribute the executed version” en (na een e-mail van [raadsman van mede-aandeelhouder]) “Will revert with the signature pages in a few minutes”. De woorden “subject to contract” komen in deze e-mails niet voor.

“This Transaction Agreement and the transactions contemplated by this Transaction Agreement are governed by and shall be construed in accordance with the laws of The Netherlands. All disputes arising out of or in connection with this Transaction Agreement shall be referred to and finally and exclusively adjudicated and settled under the rules of the Netherlands Arbitration Institute as applicable at the time of submission of the request for arbitration (the "Rules"). The Rules are incorporated by reference into this Section 14. The arbitral tribunal shall consist of three (3) arbitrators. In appointing the arbitrators, the list procedure as provided for in the Rules shall apply. The place of arbitration shall be Amsterdam and the arbitration shall be conducted in the English language only. Notwithstanding the foregoing, (i) any Party may apply to the Amsterdam District Court following proceedings in English before the Chamber for International Commercial Matters in the Court in Summary Proceedings ("CSP") for preliminary injunctive relief or similar interim measures necessary to preserve its rights pending resolution of any dispute arising out of or in connection with this Transaction Agreement through arbitration as contemplated above (with any appeals against CSP judgments being submitted to the Amsterdam Court of Appeal's Chamber for International Commercial Matters ("Netherlands Commercial Court of Appeal" or "NCCA")) and (ii) any Party may apply to any other court to the extent necessary to enforce against a Party hereto a judgment obtained pursuant to arbitration, the CSP and/or NCCA in conformity with the preceding provisions of this Section 14.”

a. Tennor made an initial indicative offer in September 2018 and a second offier in July 2019 (with a Term Sheet attached). Both documents state that they are “subject to contract”.

b. In September 2019, Tennor’s founder and chairman, Lars Windhorst, presented the transaction to the board. An advisor sent a confirmation of the presentation to [X].

c. In November 2019, Tennor provided financial data to [X] so as to confirm its ability to pay the contemplated price. However, Tennor reported an “accounting issue” in November 2019, so that closing was not feasible.

d. In a 14 November 2019 email, Tennor’s counsel sent an executed LOI and wrote that “the actual signing and closing would then occur on 18th February 2020. In the light of the above, the Transaction Agreement is now final from our perspective and reflects the content our client is prepared to agree on. Please find, therefore, the executed Cover Letter of Intent as an offer for your countersignature.”

e. In a 26 December 2019 email, Tennor’s counsel wrote (referring to the LOI): “Happy to confirm also for Tennor that drafts are final from our perspective.”

f. The LOI was signed several days later. The LOI basically states that the parties intend to enter into the transaction, but are free to elect not to do so. The LOI also states that if a party so elects (or fails to complete the transaction by 18 February 2020, later extended to 2 March 2020), the electing party owes the counterparty a fee. The LOI says nothing about dispute resolution, but it does designate Dutch law as the governing law. The LOI refers to the Transaction Agreement (setting out the proposed transaction) as an annex:

We [X], [its CEO], [its co-shareholder] (and certain affiliates), and Tennor Holding B.V. ("Tennor") have discussed whether [X] may sell and transfer to Tennor or a fully owned subsidiary of Tennor all of the outstanding shares of [a company related to X] and 50% of the outstanding membership interests in Global Champions Tour USA LLC ("GCT LLC"). In the light of this, [X], [its CEO] and Tennor declare their non- binding intention to execute the transaction agreement as attached hereto as Anne[X] 1 on the 18th of February 2020 (the "Transaction Agreement") (…).

g. Tennor’s chairman ([Tennors chairman]) said in a press release: “I look forward to working with [co-shareholder] to help build on the success of this fantastic global sports property. [Co-shareholder] has been the pioneering figure at the top level of show jumping for many years and I am delighted that Tennor will be part of that continuing journey and the exciting opportunities ahead.”

h. The parties expressed their intent to close in mid-February 2020, but in mid- February 2020, Tennor’s counsel wrote in an email that a couple weeks’ time was needed because the acquisition vehicle was not ready yet (“AcquiCo is simply not operable”). Tennor’s counsel added: “there is no reason why the transaction agreement could not be signed prior to the 2nd of March”. The term “subject to contract” is not used in this email.

i. In two emails dated 2 March 2020, Tennor’s counsel wrote: “The proposed changes are fine. If [counsel to co-shareholder] is also fine, we would distribute the executed version” and (following an email from [counsel to co-

shareholder]) “Will revert with the signature pages in a few minutes”. The term “subject to contract” is not used in this email.

This Transaction Agreement and the transactions contemplated by this Transaction Agreement are governed by and shall be construed in accordance with the laws of The Netherlands. All disputes arising out of or in connection with this Transaction Agreement shall be referred to and finally and exclusively adjudicated and settled under the rules of the Netherlands Arbitration Institute as applicable at the time of submission of the request for arbitration (the "Rules"). The Rules are incorporated by reference into this Section 14. The arbitral tribunal shall consist of three (3) arbitrators. In appointing the arbitrators, the list procedure as provided for in the Rules shall apply. The place of arbitration shall be Amsterdam and the arbitration shall be conducted in the English language only. Notwithstanding the foregoing, (i) any Party may apply to the Amsterdam District Court following proceedings in English before the Chamber for International Commercial Matters in the Court in Summary Proceedings ("CSP") for preliminary injunctive relief or similar interim measures necessary to preserve its rights pending resolution of any dispute arising out of or in connection with this Transaction Agreement through arbitration as contemplated above (with any appeals against CSP judgments being submitted to the Amsterdam Court of Appeal's Chamber for International Commercial Matters ("Netherlands Commercial Court of Appeal" or "NCCA")) and (ii) any Party may apply to any other court to the extent necessary to enforce against a Party hereto a judgment obtained pursuant to arbitration, the CSP and/or NCCA in conformity with the preceding provisions of this Section 14.

motion, at this early stage of the litigation in summary proceedings, is a preliminary analysis of all available information from both parties.12The Court finds, of its own motion, that the other requirements have been met for the NCC to deal with the matter (Article 1.3.1-2, NCC Rules).

Is there a valid NCC clause?

Tennor en [X] zijn niet uitdrukkelijk en schriftelijk (en evenmin anderszins) overeengekomen dat procedures tussen hen bij de CSP (dan wel de NCC) zullen worden gevoerd. Dit is echter wel een 'harde' eis op grond van artikel 30r Rv en artikel 1.3.2 (b) in samenhang met artikel 1.3.1 (d) van het NCC-reglement. Het betreft een hoge drempel waaraan strikt behoort te worden getoetst. De LoI bevat geen forumkeuzebeding, laat staan een uitdrukkelijke keuze voor de CSP, en dat is een bewuste keuze van partijen. De TA bevat in artikel 14 (a) wel een keuze voor de CSP (onder voorwaarde, hetgeen hieronder wordt toegelicht)

- maar de TA is niet door Tennor ondertekend of tot stand gekomen, waardoor het (ook) ten aanzien van de TA ontbreekt aan de vereiste uitdrukkelijke en schriftelijke overeenstemming tussen partijen over de keuze voor de CSP. Voor de totstandkoming van de TA is vereist dat deze door iedere partij wordt ondertekend en vervolgens aan de andere betrokken partijen wordt uitgereikt of afgegeven (‘execute and deliver’). In confesso is dat deze ondertekening en de daaropvolgende uitreiking of afgifte niet heeft plaatsgevonden, zodat de TA dus ook niet tot stand is gekomen. Daarnaast dient op grond van artikel 14 (a) van de TA voor het instellen van een procedure bij de CSP een arbitrageprocedure aanhangig te zijn tussen Tennor en [X] ('pending (...) arbitration'). Er is op dit moment geen arbitrageprocedure aanhangig tussen partijen en [X] heeft ook geen blijk gegeven hiertoe een voornemen te hebben. De conclusie is dan ook dat de CSP, nu het ontbreekt aan de vereiste keuze voor de CSP, onbevoegd is om kennis te nemen van de vorderingen van [X] in de onderhavige procedure.

The LoI was intended as only an administrative document, in order to ensure that Tennor's auditors would be comfortable that the Transaction would not be booked in financial year 2019 but in financial year 2020. It was not an indication that the parties had any intention other than to consummate the Transaction. As such, the parties intended the choice for the CSP contained in Clause 14(a) of the Transaction Agreement to be an integral part of the LoI and it was therefore attached to the LoI as an annex. Consequently, the parties chose to submit any disputes with regard to the LoI to the CSP in English as well.

Daarnaast blijkt ook nergens uit dat Tennor en [X] zouden hebben bedoeld om de forumkeuze in artikel 14 (a) van de TA een ruimer geldingsbereik te geven (…), zodanig dat deze forumkeuze ook en reeds zou zien op geschillen tussen partijen na ondertekening van de LoI en vóór ondertekening van de TA.

Dit volgt niet uit de tekst van artikel 14 (a) van de TA zelf, nu hierin enkel wordt verwezen naar "disputes arising out of or in connection with this Transaction Agreement".

(onderstreping advocaat)

Voorts bevat artikel 15 (b) van de TA een zogenoemde entire agreement-bepaling die de werking van alle eerder overeengekomen overeenkomsten uitsluit en dus de LoI elimineert:

"This Transaction Agreement represents the entire agreement between the Parties and supersedes and extinguishes all previous drafts, agreements, arrangements and understandings between the Parties, whether written or oral and whether express or implied, relating to any of the transactions contemplated hereby."

The first point in this analysis is what the term “express” means in Article 30r DCCP.

a. The Court notes the text and legislative history of Article 30r (1) DCCP.13The text states:

If the Amsterdam District Court (…) has jurisdiction to hear a dispute that has arisen or will arise as a result of a particular legal relationship which is within the autonomy of the parties to agree and which is an international dispute, and if the parties have expressly so agreed, the proceedings may be in English before the International Commercial Chamber of that district court (“Netherlands Commercial Court”) (…).

The legislative history states:

Parties must make an express decision for their case to be in the NCC and for English to be the language of the case. The NBA [Dutch Bar Association], in the consultation phase, insisted that to assess the validity of the decision for the case to be in the NCC and for English to be the language of the case, reference should be made to the requirements under Article 25 of the Brussels Regulation and Article 3 of the Hague Choice of Court Convention. The reason was to make it easy to agree an NCC clause in general terms and conditions. Such terms and conditions, containing a choice-of-court clause, may be agreed tacitly, by implication. However, as the NCC focuses on parties who make a conscious decision for the case to be in the NCC and for English to be the language of the case, this legislation includes a requirement for the clause to be made in express terms. An agreement with an NCC clause in general terms and conditions, with the counterparty’s tacit consent, does not satisfy this requirement. If the NCC clause is stated in the general terms and conditions, such a clause therefore has no force. The position would be different if the party expressly accepts a counterparty’s clause, stated in general terms and conditions, for the case to be in the NCC and for English to be the language of the case. Such acceptance must be proven by a written document.14

(…) the corner hairdresser is unlikely to end up in the NCC District Court of NCC Court of Appeal because such a hairdresser typically does not enter into international agreements, and if the hairdresser did enter into such agreements, it would probably not be for more than € 25,000 (the limit for Subdistrict Court cases). In addition, an

NCC clause must always be an express agreement by the parties. That provides additional assurance to the effect that small enterprises will not be surprised by the higher NCC District Court / NCC Court of Appeal court fee.15

b. The Court also notes Mr Drion’s16and Mr Kuijpers’17commentary on what an “express” agreement means.

c. The Court emphasises in the analysis that there is no issue of a choice-of-court clause in this case. The Court’s jurisdiction is based on the defendant’s domicile (Tennor; Amsterdam). The only issue in the motion is whether a valid NCC clause was agreed. That is why the pivotal point is the interpretation of Article 30r DCCP and the documents and other statements by the parties.

d. The Court holds that it is sufficient under Article 30r DCCP that the parties’ consent is clearly stated, was made with knowledge of the clause, is not hidden in one party’s general terms and conditions, and is recorded in writing. Article 30r DCCP does not impose any requirement to the effect that an NCC clause is valid only if included in a document signed by the parties. There is no authority in the DCCP, the legislative history or the scholarly commentary to support such a position.

a. The starting point in the analysis is that an NCC clause is separate from the main agreement in which it is included.18This means that a separate analysis is required of the issue as to whether parties have an agreement on this clause. This analysis is separate from the analysis of the issue as to whether parties have an agreement on the main agreement (the contemplated Transaction Agreement). In addition:

- there is a formal requirement for the conclusion of the Transaction Agreement (it must be “executed” and “delivered”) but it does not necessarily follow that the same requirement applies to the NCC clause, and

- the entire agreement clause in the Transaction Agreement is not material in the analysis of whether there is or is not agreement on the NCC clause.

b. [X] argues that the parties, given the contacts as set out in paragraph 3.2 above, have agreed, at least, on an NCC clause for interim measures. The Court, at this preliminary stage and applying the standard as set out in paragraph 5.1 above, agrees: the parties agreed on the designation of the NCC CSP for interim measures.

c. It is fairly obvious that each party has a major business with international, if not global, operations and ambitions. Both sides are experienced in international business, do their work in English in the ordinary course, and also used English to communicate with each other. Neither side is a consumer or small enterprise (as referred to by Mr Drion above) or “corner hairdresser” (referred to in the legislative history). Tennor was represented by a White & Case partner based in Germany, who used English for all communications. All of the correspondence is in English. All of the documentation is in English. And the Transaction Agreement expressly states that English will be the language of dispute resolution. [X]’s comment on Tennor is uncontested:

First, Tennor is not a Dutch speaking small enterprise. Instead, it is a typical international holding company: (i) it publishes its annual accounts in English, (ii) its primary offices seem to be in Berlin and London, (iii) none of its participations is Dutch, (iv) its primary bank account is outside the Netherlands, (iv) its four directors are based in the United Kingdom, Ireland, and Germany and (v) all members of its advisory board are based outside the Netherlands. Thus, Tennor's personnel and outside counsel working on the transaction are all proficient English speakers and are - as far as [X] is aware - not native Dutch speakers (and in fact, may not speak Dutch at all). So not speaking English is actually more of a burden and a cost for both parties.

d. It is completely correct, as Tennor points out, that justice must be without regard to who the parties are. Justice is blind as to the parties’ identity. But not as to their capacity. Their capacity (c. above) is a key factor in interpretation of the documents (see the Haviltex case). This is standard case law.

e. The nature and purpose of an NCC clause are, in the Court’s analysis, also relevant. The clause’s impact is – in this case – very limited. The impact is nothing more than language (English) and the higher court fee. The Amsterdam District Court is prepared to deal with certain cases in English under Article 30r DCCP, applying the statutory higher court fee. That’s it. Tennor contends it is being removed from the

court it is entitled to by law, but that is completely wrong. Tennor is and will remain, under an NCC clause, on its home turf (Amsterdam), acting in its own language (English)19– not in any other court or arbitral tribunal, foreign or domestic. The Amsterdam District Court, including the NCC, is, obviously, a tribunal “established by law” as meant in the European Convention on Human Rights; Tennor’s argument to the contrary is without merit.20The court fee is trivial compared to the costs of this matter. Tennor referred to “translation costs” as extra costs resulting from the NCC’s dealing with the case, but the costs may be expected to be much higher if the proceedings are in Dutch because last-minute translations of documents of process will be required after English-language drafts are prepared for discussions with clients.

f. The Court will now consider the close connection between the LOI and the Transaction Agreement. The LOI determines the time by which the parties must elect whether or not to conclude the Transaction Agreement, and what the consequences are if they elect not to conclude that agreement (payment of the fee). This makes the LOI different from a common type of agreement (an LOI being used to record heads of agreement, after which there are negotiations on the precise details of the agreement). In this case, the Transaction Agreement (with the NCC clause) was in essence ready for signature, but the parties wished to reserve their rights as to the time at which it would or would not be actually concluded. It is true that the NCC clause is recorded only in the Transaction Agreement, with a reference to a “dispute arising out of or in connection with this Transaction Agreement”. But given the close connection between the LOI and the Transaction Agreement, on a preliminary basis and at this early stage of the proceedings, the Court’s conclusion is that a reasonable person in the same circumstances as [X] would have understood the clause to cover disputes in respect of the LOI.21Any other interpretation of the NCC clause would mean that:

- if [X] had elected not to conclude the transaction and had owed the fee to Tennor, Tennor would have had to submit the matter to the New York courts ([X]’s domicile), under Dutch law (5.1 above);

- if the arbitral tribunal in a matter on the merits were to decide that the transaction was not entered into, the parties would have to commence further proceedings before the ordinary courts on the issue as to the fee.

On a preliminary basis and at this early stage, the Courts finds it is unlikely that this was the parties’ intent, and in any event a reasonable person in the same circumstances as [X] would not have understood this to be the position. Based on the above reasoning, the Court rejects Tennor’s argument that the formal “execute and deliver” requirement applies to the NCC clause (such that the NCC clause is agreed only when the parties sign the Transaction Agreement and deliver it to the counterparty).

g. Based on the above, in the circumstances when the LOI was signed and when the above communications occurred (3.2), it would not take much for [X] to understand, on reasonable grounds, that Tennor was willing if not eager (a) to agree an NCC clause for interim measures in respect of a dispute “in connection with” the Transaction Agreement and (b) for this clause to cover disputes arising on the conclusion of the Transaction Agreement or under the LOI. On a preliminary basis

and at this early stage, the language in the LOI and the further contacts (3.2 above) are more than enough to clear this bar.

h. The Court’s analysis is confirmed by the term “subject to contract”. Among M&A specialists such as the parties, this term refers to a reservation of rights: there is no agreement at that stage, prior to the formal documentation being prepared and agreed. This term was used in respect of the first and second offers by Tennor’s counsel, who (the Court must accept) perfectly understood its meaning in M&A practice. At a later stage, the term was no longer used. This is a circumstance, in the broader context, that is significant and contributed to [X]’s reasonable understanding.

i. In legal terms, this means a reasonable person such as [X] in the circumstances22would have understood the LOI and the parties’ contacts (3.2 above) to mean that disputes such as the main and alternative claims may be submitted to the NCC CSP for interim measures. That is the most compelling interpretation and the parties’ express intent in the circumstances.

j. None of this says anything about whether the Transaction Agreement as a whole was or was not entered into. That is an issue for another day – the proceedings in a main action on the merits, and, as to the interim measures claimed, the next steps in these summary proceedings. The bar may be higher, or even substantially higher, in respect of the Transaction Agreement as a whole, given its nature, meaning and importance (taking the shares/a business, paying a substantial price), in the context of market practices among M&A specialists such as the parties.

Must the NCC refer the matter because no arbitration is “pending”?

Notwithstanding the foregoing, (i) any Party may apply to the Amsterdam District Court following proceedings in English before the Chamber for International Commercial Matters in the Court in Summary Proceedings ("CSP") for preliminary injunctive relief or similar interim measures necessary to preserve its rights pending resolution of any dispute arising out of or in connection with this Transaction Agreement through arbitration (…).

resolution of a dispute through arbitration.23That is the ordinary and plain meaning of the English word “pending” in this context. The Court therefore rejects Tennor’s argument.

Does Tennor have any interest in support of its motion?

Final points

Done by L.S. Frakes, Judge, assisted by W.A. Visser, Clerk of the Court. Issued in public on 14 April 2020.

APPROVED FOR DISTRIBUTION IN eNCC

THE SIGNED ORIGINAL IS IN THE HARD COPY FILE

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