NORWAY Trends and Developments Contributed by: Christian Reusch, Jenny Sandvig, Oda Lauksund Engamo and Therese Sætre Løfsgaard, Advokatfirmaet Simonsen Vogt Wiig
Advokatfirmaet Simonsen Vogt Wiig Filipstad brygge 1 P. O. Box 2043 Vika N-0125 Oslo Norway Tel: +47 21 95 55 00 Email: post.oslo@svw.no Web: www.svw.no
Introduction The aim of this article is to introduce the reader to some significant legal trends and recent developments within dispute resolution and litigation in Norway. Commercial Litigation Court-ordered revisions of commercial contracts – a new era of disclosure and loyalty? Introduction As in most jurisdictions, Norwegian law starts from the premise that agreements are binding. The Norwegian Agreement Act includes a narrow exception from this principle in Section 36, which allows courts to set aside or amend agreements it would be unreasonable to invoke. The general notion has for some time been that Sec- tion 36 of the Agreement Act has very limited applica- tion in the context of commercial contracts, as pre- dictability is a particularly important consideration in business relations. This view was, however, recently nuanced by the Supreme Court in a decision published as HR- 2025-251-A Red Rock, where the Court unanimously concluded that a debt reduction agreement following a share purchase transaction had to be set aside as unreasonable. Facts and issues The case involved six founders of a marine technology company. In 2017, the parties agreed that two of the founders (the Buyers) would purchase the shares of
the other four (the Sellers) for about NOK41 million, to facilitate a future sale of the company. The Sellers agreed to lend the Buyers the purchase price, with repayment due in full in December 2021. The purchase price was based on a company valua- tion of NOK90 million. In the spring of 2021, the Sellers agreed to reduce the purchase price of their shares by 70% to about NOK12.2 million. The Buyers had led the Sellers to believe that the company value had fallen and that the reduction was necessary to secure a NOK50 million investment from a third-party investor and avoid bankruptcy. However, the Buyers failed to inform the Sellers that the third-party investor had valued the company at NOK175 million. The Sellers therefore claimed that the debt reduction agreement was unreasonable and should be set aside under Section 36 of the Agree- ment Act. Takeaways of general interest from the Court’s decision As noted above, the Court found the debt reduction agreement unreasonable and made several important observations on how the revision rule in Section 36 of the Agreement Act should be applied to commercial contracts. Key takeaways include: • The high threshold for revising commercial con- tracts primarily applies in instances where the alleged unreasonableness is based on subse-
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