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Contract – Terms. The defendant company entered into a sale and purchase agreement (SPA) to sell or procure the sale of businesses and related assets, including a property, to three companies, including the claimant company. Under the SPA, the property was to be transferred to the claimant, but in the event, the claimant acquired a ten year lease in respect of it. The SPA contained environmental provisions, by which defendant agreed to indemnify the claimant and others in relation to environmental matters. The claimant sought a declaration as to whether, on the true construction of the SPA, it had a claim against the defendant, under the indemnity clause in the SPA, simply by virtue of the presence of hazardous substances at the property. The Chancery Division dismissed the claim, ruling that the claimant did not have a claim unless it could establish that it was liable to some third party for all sums payable to, or by reason of the directions or order of, any authority or agency responsible for compliance with environmental laws.
Contract – Terms. The defendant company entered into a sale and purchase agreement (SPA) to sell or procure the sale of businesses and related assets, including a property, to three companies, including the claimant company. Under the SPA, the property was to be transferred to the claimant, but in the event, the claimant acquired a ten year lease in respect of it. The SPA contained environmental provisions, by which defendant agreed to indemnify the claimant and others in relation to environmental matters. The claimant sought a declaration as to whether, on the true construction of the SPA, it had a claim against the defendant, under the indemnity clause in the SPA, simply by virtue of the presence of hazardous substances at the property. The Chancery Division dismissed the claim, ruling that the claimant did not have a claim unless it could establish that it was liable to some third party for all sums payable to, or by reason of the directions or order of, any authority or agency responsible for compliance with environmental laws.
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