ZipTracker: MasterBreach?

Hi ZipLawyer! I'm Ludo Lugnani and this is ZipLaw. This is a subscriber-only newsletter called ZipTracker where we cover court cases and deals which law firms have been advising on to help you stand out in applications and interviews and develop your Commercial Awareness!

Today's newsletter is a ~7 min read:

• ⚖️ In Court: Court cases featuring Bird & Bird, Goodwin Procter, CMS, Reed Smith, RPC, Kirkland & Ellis.
• 🤝 Deals Time: Deals featuring White & Case, Shoosmiths, Skadden, Addleshaw Goddard, and Slaughter and May.

⚖️ In Court

MasterBreach?

Summary: German food delivery service Delivery Hero has filed a $40m lawsuit against a Mastercard subsidiary, accusing it of failing to pay a sign-up bonus for a payment processing services contract. The claim was filed in Singapore's High Court and includes a claim for $100,000 spent on a marketing campaign across Asia.

Background to the case: Delivery Hero and Mastercard entered into an agreement in October 2021 for Mastercard to provide payment processing services in Japan, Taiwan, Hong Kong, Singapore, Malaysia, Thailand, the Philippines, Laos, Cambodia, Bangladesh, and Myanmar. However, Delivery Hero claims that Mastercard breached its contract by failing to provide the sign-on bonus that was due in April 2022.

Key Points to note:

• Mastercard said in that letter that Delivery Hero failed to inform it that it would not be using acquirers willing to enable Mastercard's own payment gateway service in Taiwan, Hong Kong, Singapore, Laos, and Bangladesh.
• Mastercard sent an email in September 2022 seeking to terminate the agreement over material breaches. Delivery Hero is asking the court to invalidate Mastercard's termination of the contract.
• Delivery Hero said in its claim that it told Mastercard of its intention not to use its own payment gateway service in some countries, and in any event doing so did not breach the terms of the contract.
• Delivery Hero argues that the contract with Mastercard did not require the exclusive use of Mastercard's payment gateway service, and Delivery Hero was only obligated to "use its best efforts" to take payments via Mastercard or other approved cards.
• Delivery Hero mentioned it attempted to introduce "HeroCash," a digital wallet linked to a physical and digital Mastercard for use in certain territories but was forced to abandon the project after facing legal hurdles in the Philippines.

Who advised on this?

• Delivery Hero is represented by Sa'ad Hossain KC and Harry Stratton of One Essex Court, instructed by Goodwin Procter.
• Mastercard is represented by Bird & Bird.

⚖️ In Court

Percy Pensions

Summary: Marks & Spencer (M&S) has denied a claim for $1.2 million in pension benefits by a former Brooks Brothers CEO, William Vincent Roberti.

Background to the case: Roberti retired as CEO of Brooks Brothers in 1994 and claimed that M&S broke their agreement by failing to step in to cover his pension plan after Brooks Brothers halted payments when it filed for bankruptcy in 2020. He is claiming $191,000 for missed payments so far, plus $6,800 a month until his death and the death of his wife after that. Alternatively, Roberti wants a lump sum of $1.2 million.

Key Points to note:

• M&S admitted in its response that it agreed to ensure that he received pension payments if Brooks Brothers failed to pay out.
• However, its guarantee had ceased because Brooks Brothers' identity was absorbed by Retail Brand Alliance (RBA)during the 2003 merger and ultimately lost. M&S sold Brooks Brothers to RBA for $225 million in 2001 as part of a strategy to refocus on its British operations.
• M&S said that it was released from the guarantee because RBA had become the "principal obligor" as a result of the deal.

Who advised on this?

• Roberti is represented by Elizabeth Ovey of Radcliffe Chambers, instructed by MBM Commercial.
• M&S is represented by CMS Cameron McKenna Nabarro Olswang.

⚖️ In Court

Le Bénédicité

Summary: The High Court in London has refused permission for the aristocratic Wemyss family to appeal a December ruling that cleared Simon Dickinson, former senior director at Christie's, of negligence in the sale of an 18th-century painting by French artist Jean-Baptiste-Simeon Chardin.

Background to the case: In 2014, Dickinson helped arrange the sale of Chardin's famous painting "Le Bénédicité (Saying Grace)" from the Wemyss family collection to a gallery in Stockholm. He recommended that the piece should be sold for £1.15 million because it had been created by "Chardin and Studio" rather than by "Chardin" himself. However, a later deep cleaning of the painting revealed the artist's signature, and the piece was resold for $10.5 million as an original masterpiece.

Key Points to note:

• The judge wrote in his judgment that there can only be negligence when the seller "knew, or should have known, that they could have sold at a higher price" and there was no evidence to suggest that had been the case.
• The claimants argued that the judge was wrong to find that there was no duty on Dickinson to advise or warn the Wemyss trust that there was a possibility that the painting could be sold as an autographed Chardin and could therefore be worth considerably more than his valuation.

Who advised on this?

• The claimants are represented by Andrew Onslow KC and Gretel Scott of 3VB, instructed by Reynolds Porter Chamberlain.
• Dickinson is represented by Henry Legge KC and Eliza Eagling of 5 Stone Buildings, instructed by Howard Kennedy.

⚖️ In Court

Licence Troubles

Summary: A French subsidiary of Thales, has told the High Court that its two patents for technology used to remotely activate SIM cards are valid and that the licences offered to Kigen were fair, reasonable, and non-discriminatory (FRAND).

Background to the case:

Kigen had sued Thales in May last year after the two companies failed to reach an agreement on the licensing terms for the patents. Kigen argued that the two Thales patents were neither new nor essential to remote SIM card activation technology. Thales said that it was concerned about the potential cost of litigating the patents in the UK and urged the court to first address the issue of the FRAND terms.

Key Points to note:

• Thales said that it would not be filing a counterclaim of infringement against Kigen as it hopes that the court will address the FRAND terms first and force the UK tech company to take a license, eliminating the need for any infringement finding.
• Kigen cited two prior European patents and other publications that it said predated the Thales patents. Thales denied that the European patents cited by Kigen covered the same technology as its standard-essential patents.
• Kigen said in a hearing in November that they would not take a license for the patents even on FRAND terms determined by the High Court. But Kigen later conceded this point.

Who advised on this?

• Kigen is represented by Iain Purvis KC, Kathryn Pickard, and David Ivison of 11 South Square, instructed by Reed Smith.
• Thales is represented by Mark Chacksfield KC and Thomas Jones of 8 New Square of Lincoln's Inn, instructed by Kirkland & Ellis.

🤝 Deals Time

SPAC Analytics

Summary: Wejo, a cloud and software analytics company, has agreed to merge with TKB Critical Technologies 1, a blank-check company, in a deal that is expected to generate $100 million in capital.

Key Points to note:

• The funds will be used to fund growth initiatives for Wejo and potentially reach cashflow breakeven, expected by mid-2025.. Wejo plans to raise $100 million through a combination of a private investment in public equity (PIPE) fundraise and funds from TKB's trust.
• The proposed merger is structured as a stock-for-stock combination, where Wejo and TKB will become wholly owned subsidiaries of a new holding company that will operate under the name Wejo Holdings. The transaction is expected to close in the second quarter of 2023, subject to customary closing conditions.
• Wejo has nearly 60 patents pending, and partnerships with companies such as General Motors, Microsoft Corporation and Sompo.

Who advised on this?

• Skadden Arps Slate Meagher & Flom advised Wejo,
• White & Case advised TKB
• Paul Hastings represented Jeffries who acted as financial adviser and capital markets adviser to TKB, and as a placement agent in connection with the anticipated PIPE.

🤝 Deals Time

Insurance Expansion

Summary: Insurance group Jensten has acquired broker Coversure Kidderminster as it aims to expand its regional presence in the Midlands of England.

Key Points to note:

• Jensten will fold Coversure Kidderminster into its insurance broking business later in the year.
• The broker, based in the Midlands county of Worcestershire, will form the base for Jensten's operations in the region, the group said, which it plans to grow through further acquisitions.
• The deal is subject to regulatory approval. This is typically done to ensure that the acquisition does not violate any laws or regulations related to competition, anti-trust, or consumer protection. The regulatory approval process can also involve review of the financial stability and solvency of the companies involved in the deal. This is to make sure that the deal will not pose a risk to the stability of the overall market and will not cause any harm to the customers or the policyholders of the companies.

Who advised on this?

• Shoosmiths advised Jensten on the deal.

🤝 Deals Time

Retirement Investments

Summary: Nucleus Financial, which runs retirement platforms for financial advisers, is to buy self-invested personal pension schemes provider Curtis Banks for £242m.

Key Points to note:

• The deal will create a leading adviser focused on retirements, with approximately £80 billion of assets under administration.
• Nucleus Financial Platforms said that it will buy Curtis Banks Group for 350 pence per share, which represents a 32.1% increase on Curtis Banks' share price on 24 November which was the last day before the offer period.
• Curtis Banks is one of the largest providers of Self-Invested Personal Pension (SIPP)— a type of pension in that people choose their own investments from a wider range than other pensions.

Who represented who:

• Slaughter and May is advising Nucleus on the deal.
• Addleshaw Goddard is advising Curtis Banks.