The measure of damages that a purchaser can claim under a Share Purchase Agreement for breach of warranty is relevant to insurers’ exposure under a Buyer’s W&I insurance policy. In the recent case of Oversea-Chinese Banking Corporation Limited v ING Bank NV  EWHC 676 (Comm), the High Court has reaffirmed that the measure of contractual damages for breach of warranty is the diminution in value of the target company. Oversea-Chinese Banking sought, unsuccessfully, to argue that an alternative measure of damages (based on a hypothetical indemnity) should apply. Whilst it was accepted by the parties that Oversea-Chinese Banking had suffered a loss of c. $14.5m as a result of ING’s breach of the accounts warranty, Oversea-Chinese Banking was unable to recover any damages since the breach of warranty had no impact on the value of the target company. Our full article on this case can be found here.
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