A recent decision in the case of Cantor Fitzgerald & Co v YES Bank Limited [2024] EWCA Civ 695 stressed the importance of grammar and unambiguity in commercial contract drafting. The decision turned on the interpretation of a single adjective used to describe a list of nouns.
The dispute related to an engagement letter for assistance with capital raising. The definition of “Financing” within the same was “the private placement, offering or other sale of equity instruments in any form, including, without limitation, preferred or common equity, or instruments convertible into preferred or common equity or other related forms of interest or capital of the Company in one or a series of transactions”. There was contention as to whether “private” only qualified the “placement” of equity instruments or extended to “offering or other sale of equity instruments”. The relevance of the definition was to decide whether a financing fee was payable in connection with a Further Public Offering (FPO), which was not an option at the time the engagement letter was prepared.
The High Court decided that “private” qualified all elements in the list based on the ordinary interpretation of the definition alongside contextual factors. Cantor appealed, arguing that the ordinary meaning of the definition of financing did not cover all forms of equity financing and that the wider contractual context did not affect the construction. This appeal was dismissed by the Court of Appeal, who decided that an adjective at the start of a list will generally qualify the entirety of the proceeding list.
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