Rice v Napril Holding Ltd [2026] EWHC 1897 (KB) (24 July 2026)
In Rice v Napril Holding Ltd [2026] EWHC 1897 Sweeting J considered the proper interpretation of ‘earn out’ provisions in a detailed share purchase agreement (SPA).
The dispute arose from a share purchase agreement where the claimant sold to the defendant, Napril Holding Limited, an umbrella payroll company. The purchase price included an earn-out mechanism, “New Revenue”, the definition of which the claimant argued encompassed the entirety of the revenue generated by Napril Holding Limited during the designated Stretch Value Period. The defendant counterclaim sought to limit the final payout by suggesting the interpretation of “New Revenue” consisted of a 25% turnover threshold and that it wasn’t applicable to all revenue streams.
Sweeting J granted summary judgment in favour of the claimant, and dismissed the counterclaim, having found that the defendant had no realistic prospect of success.
Readily accepting the claimant’s invitation to “grasp the nettle” on the point of contractual interpretation, Sweeting J confirmed that, particularly where the company’s business model was known to both parties, such that it formed part of the relevant factual matrix, the definition of “New Revenue” was unambiguous and accurate to encompass the entirety of the revenue generated by Napril Holding Limited during the Stretch Value Period.
This ruling reinforces the Court’s robust approach to summary judgment when interpreting commercial contracts. Edward Cumming KC – who is often instructed in relation to high-stakes points of contractual interpretation, especially in the context of complex M&A transactions, and share purchase agreements in the light of his appearance in the Supreme Court in Wood v Capita Insurance Services Ltd& anr [2017] AC 1173 – appeared for the successful claimant.
To read the full judgment, please click here.
Edward Cumming KC and Sam Neaman were instructed by Gerard Cukier of Keystone Law Limited for the Claimant.
