CONGO BRAZZAVILLE Law and Practice Contributed by: Louis-Raymond Gomes and Prince Kyssama Dikoulou, Cabinet Gomes
price adjustment are also very common. As Congo- Brazzaville is a singular jurisdiction, if the buyer is for - eign with little mastery of the market, there is usually a transition period where the prices are event-based adjusted. In practice, the authors see more private equity funds as buyers than as sellers; as such, the buyers usually have little leverage in negotiation as they are usually more in need than the latter. 6.2 Locked-Box Consideration Structures Such practice is not common in this jurisdiction. Usu - ally, no interest is charged in the equity price, though potentially this could be negotiated between the par - ties. 6.3 Dispute Resolution for Consideration Structures It is very common to have a dedicated expert or to use other dispute resolution mechanisms in private equity transactions. This does not differ according to the type of structure, but because of the terms of the agreements. The parties’ contractual relationship is Conditionality is very frequent in Congo-Brazzaville, as several regulatory conditions must be met before a deal can close – whether regional or domestic. It is common to see material adverse change provisions as well as third-party consent, depending on the industry (where the review of material operational or financing contracts shows the need for such consent). 6.5 “Hell or High Water” Undertakings This is unlikely to be accepted; this jurisdiction does not make such a distinction. The EU FSR regime is not applicable in Congo-Brazzavillle. 6.6 Break Fees Break fees are common practice. The parties gen - erally provide for a break fee where the financing is conditional on debt and where there is a long lead to closing, meaning that their assets are immobilised for a long time and they lose the opportunity to engage with another buyer. governed by freedom of contract. 6.4 Conditionality in Acquisition Documentation
Local regulation does not provide for a limit on the amount or percentage of the break fee. Reverse break fee clauses are also legal but are rarely seen in practice. 6.7 Termination Rights in Acquisition Documentation Acquisition agreements generally determine the cir - cumstances under which the agreement can be ter - minated by either party. Termination often occurs when the parties fail to perform in accordance with the terms of the agreement or when the conditions precedent are not cleared. A typical longstop date will vary between three to six months, and may be up to a year for matters of high exclusivity and that are highly regulated. 6.8 Allocation of Risk The typical allocation of risk does not differ; little dis - tinction is made in this regard. 6.9 Warranty and Indemnity Protection Private equity-backed sellers typically provide war - ranties and indemnities that focus on title, ownership and compliance with key obligations, particularly with confirmation that: • the seller has valid title to the shares or assets being sold and is entitled to transfer them free from encumbrances; • all tax liabilities have been properly settled, and no undisclosed or contingent tax obligations exist; and • there are no outstanding, unknown payments or debts owed by the selling entity that could impact the buyer post-acquisition. Limits on liability for these warranties and indemnities are not prescribed by law and are instead determined through negotiation between the parties. It is common practice to include caps on liability (quantum limits), time limitations (for example, claims must be brought within 12–24 months post-closing) and exclusions for known issues disclosed during due diligence. How - ever, these limitations can be tailored depending on the size, complexity and risk profile of the transaction.
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