“The Guarantor covenants with the Trustee that it will, in accordance with these presents, on the Contingent Payment Date pay or procure to be paid unconditionally to or to the order of the Trustee or to such account as the Trustee may direct in Euro in immediately available funds the Contingent Payment PROVIDED THAT: (A) every payment of the Contingent payment to or to the account of the Principal Paying and Transfer Agent in the manner provided in the Agency Agreement shall operate in satisfaction pro tanto of the relative covenant by the Guarantor in this Clause except to the extent that there is default in the subsequent payment thereof in accordance with the Conditions to the Bondholders; (B) in any case where payment of the Contingent Payment is not made to the Trustee or the Principal Paying and Transfer Agent on or before the Contingent Payment Date, interest shall start to accrue on the Contingent Payment (both before and after any judgment or other order of a court of competent jurisdiction) at the rate that was applicable to the Bonds immediately prior to their final redemption (or, if higher, the rate of interest on judgment debts for the time being provided by English law) up to and including the date which the Trustee determines to be the date on and after which payment is to be made to the Bondholders in respect thereof as stated in a notice given to the Bondholders in accordance with Condition 16 (such date to be not later than 30 days after the day on which the whole of the Contingent Payment, together with an amount equal to the interest which has accrued and is to accrue pursuant to this proviso up to and including that date, has been received by the Trustee or the Principal Paying and Transfer Agent); and (C) in any case where payment of the whole or any part of the Contingent Payment is improperly withheld or refused upon due presentation thereof (other than in circumstances contemplated by proviso (D) above) interest shall accrue on that part of the Contingent Payment, payment of which has been so withheld or refused (both before and after any judgment or other order of a court of competent jurisdiction) at the rate that was applicable to the Bonds immediately prior to their final redemption (or, if higher, the rate of interest on judgment debts for the time being provided by English law) from and including the date of such withholding or refusal up to and including the date on which, upon further presentation of the Bond, payment of the full amount (including interest as aforesaid) in Euro payable in respect of the Contingent Payment is made or (if earlier) the seventh day after notice is given to the Bondholder (either individually or in accordance with Condition 16) that the full amount (including interest as aforesaid) in Euro payable in respect of the Contingent Payment is available for payment, provided that, upon further presentation thereof being duly made, such payment is made.”
“The Guarantor hereby covenants with the Trustee that: … (C) it will procure the compliance by the Issuer with all the Issuer’s obligations under the Bonds and this Trust Deed;”
“8.1 The Guarantor hereby irrevocably and unconditionally guarantees to the Trustee: (A) the due punctual payment in accordance with the provisions of these presents of the Principal of and premium and interest on the Bonds and of any other amounts payable by the Issuer under the Bonds or otherwise under these presents; (B) the due and punctual performance and observance by the Issuer of each of the other provisions of the presents on the Issuer’s part to be performed or observed. 8.2 If the Issuer fails for any reason whatsoever punctually to pay any such Principal, interest or other amount, the Guarantor shall cause each and every such payment to be made as if the Guarantor instead of the Issuer was expressed to be the primary obligor under these presents and not merely as surety (but without affecting the Issuer’s obligations) to the intent that the Bondholders will receive the same amounts in respect of Principle, premium, interest or such other amount as would have been receivable had such payment been made by the Issuer PROVIDED THAT: (A) where the Issuer is or would be required to deduct or withhold from such payment any amount for or on account of any withholding taxes, upon a call being made under this Clause, the Guarantor shall pay the full amount due to the Trustee as if no withholding or deduction was required to be made by the Insurer; and (B) where the Guarantor is required to deduct or withhold any amount for or on account of any withholding taxes, the Guarantor shall pay the amount due to the Trustee under deduction of any withholding taxes, together with such additional amounts as may be necessary to ensure that the Trustee receives a net amount equal to the full amount which it would have received had payment not been made subject to tax.”
“Unless previously purchased or redeemed as herein provided, the Bonds will be redeemed at the Adjusted Principle Amount together with accrued interest on December 15, 2005 (the “Repayment Maturity Date”). The Bonds may not be redeemed at the option of the Issuer or the Guarantor other than in accordance with this Condition 6.
“The Guarantor will pay an amount equal to the Contingent Payment (if any) to the Bondholders on the Contingent Payment Date. The Contingent Payment will be distributed to the Bondholders pro rata to the principal amount outstanding of the bonds that they held immediately prior to the final redemption of the bonds on the Repayment Maturity Date in accordance with Condition 6(a) or, if earlier, immediately prior to the final redemption payment in respect of the Bonds (the “Final Date”). Within five Business Days of the Contingent Payment Determination Date, the Guarantor shall give notice to the Bondholders (with a copy to Euroclear, Clearstream, Luxembourg, the Principal Paying and Transfer Agent and the Bond Trustee) of the size of the Contingent Payment (if any) and of the date fixed as the Contingent Payment Date. The Bond Trustee shall be entitled to assume that no Contingent Payment is due under this Condition 6(k) unless and until expressly notified to the contrary in writing by the Guarantor and, if so notified, the Bond Trustee shall be entitled to rely absolutely on any certificate signed by any two directors of the Guarantor as to the amount of the Contingent Payment without being obliged to investigate or verify the accuracy thereof. Any such certificate will be binding on the Bond Trustee and the Bondholders in the absence of manifest error. For the avoidance of doubt, the obligation to make the Contingent Payment under this Condition 6(k) is an obligation of the Guarantor and not of the Issuer. The Guarantor’s obligation to make the Contingent Payment is secured only by the security described in paragraph (vi) of Condition 8(a) below. In this Condition 6(k): “Contingent Payment” means an amount calculated by the Guarantor that is equal to the Relevant Portion of: (i) the Fair Market Value; minus (ii) (a)€160,000,000 less (x) any payments made by the Guarantor in respect of the purchases or redemptions of its own shares, and (y) the amount of any loans to the Guarantor’s shareholders made or acquired by the Guarantor, in each case before the Contingent Payment Determination Date; and (b) 50 per cent of the costs incurred by the Guarantor of engaging the investment banks appointed to determine the Fair Market Value. For the avoidance of doubt, no interest shall accrue on the Contingent Payment during the period between the Contingent Payment Determination Date and the Contingent Payment Date; “Contingent Payment Date” means such date (being a Business Day) falling no later than 180 days after the Contingent Payment Determination Date as the Guarantor may select and notify as such to the Bondholders in accordance with this Condition 6(k); “Contingent Payment Determination Date” means a date falling after, but no later than 20 Business Days after, the earlier of: (i) the date on which the Guarantor publishes its annual audited consolidated financial statements for the year ending December 31, 2005; and (ii) the date on which the Guarantor publishes its annual audited consolidated financial statements for the year ending on the December 31 immediately following the disposal of its interests in the ET Shares, the Carcom Shares and the PAK Shares, provided that, in the event that the Bonds have been redeemed in full at the Adjusted Principal Amount together with accrued interest, the Guarantor may elect that the Contingent Payment Determination Date shall be the date on which the Guarantor publishes its annual audited consolidated financial statements for the year ending on the December 31 immediately following such redemption; “Fair Market Value” means the fair market value of the assets of the Guarantor (including, without limitation, the Guarantor’s interest in any affiliates, but excluding the receivables from any loans to the Guarantor’s shareholders made by the Guarantor) after deduction of any debt (but excluding contingent liabilities or amounts due in respect of working capital) and assuming that the Guarantor has no obligations in respect of the Contingent Payment, as determined (by reference to the most recent annual audited consolidated financial statements of the Guarantor) on the Contingent Payment Determination Date by two leading investment banks of international repute, appointed by, and at the expense of, the Guarantor, one chosen by the Guarantor and one chosen by the Bond Trustee, on the basis that: (i) if the higher of the two valuations is less than 15 per cent greater than the lower valuation or the two valuations are the same, then the Fair Market Value shall be the arithmetical mean of the two valuations; (ii) if the higher of the two valuations is 15 per cent or more greater than the lower valuation, then the Guarantor shall, at the expense of the Guarantor, appoint a third investment bank chosen jointly by the Guarantor and the Bond Trustee to determine the Fair Market Value, which valuation must be no higher than the higher valuation and no lower than the lower valuation determined by the original two investment banks and which valuation shall be conclusive and binding on the Issuer, the Guarantor, the Bond Trustee and the Bondholders; and (iii) the investment banks shall act as experts and not as arbitrators, and their determination and findings shall be conclusive and binding on the Issuer, the Guarantor, the Bond Trustee and the Bondholders; and “Relevant Portion” means: (i) in the event that the Final Date occurs in the year ending December 31, 2003, 10 per cent; (ii) in the event that the Final Date occurs on or after January 1, 2004 but on or before December 31, 2004, the sum of (A) 10 per cent, plus (B) the percentage rate obtained by multiplying 10 per cent by a fraction (i) the numerator of which is equal to the actual number of days from and including January 1, 2004 to but excluding the Final Date, and (ii) the denominator of which is 366; and (iii) in the event that the Final Date occurs on or after January 1, 2005 but on or before the Repayment Maturity Date, the sum of (A) 20 per cent, plus (B) the percentage rate obtained by multiplying 5 per cent by a fraction (i) the numerator of which is equal to the actual number of days from and including January 1, 2005 to but excluding the Final Date, and (ii) the denominator of which is 349. …”
“31. An entity shall not recognise a contingent asset. 32 Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. An example is a claim that an entity is pursuing through legal processes, where the outcome is uncertain. 33 Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and recognition is appropriate. 34 A contingent asset is disclosed, as required by paragraph 89, where an inflow of economic benefits is probable. 35 Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised in the financial statements of the period in which the change occurs. If an inflow of economic benefits has become probable, an entity discloses the contingent asset (see paragraph 89).”
“49. The elements directly related to the measurement of financial position are assets, liabilities and equity. These are defined as follows: (a) An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. (b) A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. (c) Equity is the residual interest in the assets of the entity after deducting all its liabilities. 50. The definitions of an asset and a liability identify their essential features but do not attempt to specify the criteria that need to be met before they are recognised in the balance sheet. Thus, the definitions embrace items that are not recognised as assets or liabilities in the balance sheet because they do not satisfy the criteria for recognition discussed in paragraphs 82 to 98. In particular, the expectation that future economic benefits will flow to or from an entity must be sufficiently certain to meet the probability criterion in paragraph 83 before an asset or liability is recognised. 51 In assessing whether an item meets the definition of an asset, liability or equity, attention needs to be given to its underlying substance and economic reality and not merely its legal form. Thus, for example, in the case of finance leases, the substance and economic reality are that the lessee acquires the economic benefits of the use of the leased asset for the major part of its useful life in return for entering into an obligation to pay for that right an amount approximating to the fair value of the asset and the related finance charge. Hence, the finance lease gives rise to items that satisfy the definition of an asset and a liability and are recognised as such in the lessee’s balance sheet. … Liabilities 60 An essential characteristic of a liability is that the entity has a present obligation… 61 A distinction needs to be drawn between a present obligation and a future commitment. A decision by the management of an entity to acquire assets in the future does not, of itself, give rise to a present obligation. An obligation normally arises only when the asset is delivered or the entity enters into an irrevocable agreement to acquire the asset. In the latter case, the irrevocable nature of the agreement means that the economic consequences of failing to honour the obligation, for example, because of the existence of a substantial penalty, leave the entity with little, if any, discretion to avoid the outflow of resources to another party. … The probability of future economic benefit 85. The concept of probability is used in the recognition criteria to refer to the degree of uncertainty that the future economic benefits associated with the item will flow to or from the entity. The concept is in keeping with the uncertainty that characterises the environment in which an entity operates. Assessments of the degree of uncertainty attaching to the flow of future economic benefits are made on the basis of the evidence available when the financial statements are prepared. For example, when it is probable that a receivable owed to an entity will be paid, it is then justifiable, in the absence of any evidence to the contrary, to recognise the receivable as an asset. For a large population of receivables, however, some degree of non-payment is normally considered probable; hence an expense representing the expected reduction in economic benefits is recognised. Reliability of measurement 86. The second criterion for the recognition of an item is that it possesses a cost or value that can be measured with reliability as discussed in paragraphs 31 to 38 of this Framework. In many cases, cost or value must be estimated; the use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability. When, however, a reasonable estimate cannot be made the item is not recognised in the balance sheet or income statement. For example, the expected proceeds from a lawsuit may meet the definitions of both an asset and income as well as the probability criterion for recognition; however, if it is not possible for the claim to be measured reliably, it should not be recognised as an asset or as income; the existence of the claim, however, would be disclosed in the notes, explanatory material or supplementary schedules. … 88 An item that possesses the essential characteristics of an element but fails to meet the criteria for recognition may nonetheless warrant disclosure in the notes, explanatory material or in supplementary schedules. This is appropriate when knowledge of the item is considered to be relevant to the evaluation of the financial position, performance and changes in financial position of an entity by the users of financial statements.”
“Definitions 10. The following terms are used in this Standard with the meanings specified: A provision is a liability of uncertain timing or amount. A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. … A contingent liability is: (a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or (b) a present obligation that arises from past events but is not recognised because: (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) the amount of the obligation cannot be measured with sufficient reliability. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. … Relationship between provisions and contingent liabilities 12. In a general sense, all provisions are contingent because they are uncertain in timing or amount. However, within this Standard the term ‘contingent’ is used for liabilities and assets that are not recognised because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. In addition, the term ‘contingent liability’ is used for liabilities that do not meet the recognition criteria. 13. This Standard distinguishes between: (a) provisions – which are recognised as liabilities (assuming that a reliable estimate can be made) because they are present obligations and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations; and (b) contingent liabilities – which are not recognised as liabilities because they are either: (i) possible obligations, as it has yet to be confirmed whether the entity has a present obligation that could lead to an outflow of resources embodying economic benefits; or (ii) present obligations that do not meet the recognition criteria in this Standard (because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a sufficiently reliable estimate of the amount of the obligation cannot be made). Recognition Provisions 14. A provision shall be recognised when: (a) an entity has a present obligation (legal or constructive) as a result of a past event; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If these conditions are not met, no provision shall be recognised. … 16. In almost all cases it will be clear whether a past event has given rise to a present obligation. In rare cases, for example in a law suit, it may be disputed either whether certain events have occurred or whether those events result in a present obligation. In such a case, an entity determines whether a present obligation exists at the balance sheet date by taking account of all available evidence, including, for example, the opinion of experts. The evidence considered includes any additional evidence provided by events after the balance sheet date. On the basis of such evidence: (a) where it is more likely than not that a present obligation exists at the balance sheet date, the entity recognises a provision (if the recognition criteria are met); and (b) where it is more likely that no present obligation exists at the balance sheet date, the entity discloses a contingent liability, unless the possibility of an outflow of resources embodying economic benefits is remote … 19. It is only those obligations arising from past events existing independently of an entity’s future actions (ie the future conduct of its business) that are recognised as provisions. Examples of such obligations are penalties or clean-up costs for unlawful environmental damage, both of which would lead to an outflow of resources embodying economic benefits in settlement regardless of the future actions of the entity. Similarly, an entity recognises a provision for the decommissioning costs of an oil installation or a nuclear power station to the extent that the entity is obliged to rectify damage already caused. … Probable outflow of resources embodying economic benefits 23. For a liability to qualify for recognition there must be not only a present obligation but also the probability of an outflow of resources embodying economic benefits to settle that obligation. For the purpose of this Standard, an outflow of resources or other event is regarded as probable if the event is more likely than not to occur, ie the probability that the event will occur is greater than the probability that it will not. Where it is not probable that a present obligation exists, an entity discloses a contingent liability, unless the possibility of an outflow of resources embodying economic benefits is remote … Reliable estimate of the obligation 25. The use of estimates is an essential part of the preparation of financial statements and does not undermine their reliability. This is especially true in the case of provisions, which by their nature are more uncertain than most other balance sheet items. Except in extremely rare cases, an entity will be able to determine a range of possible outcomes and can therefore make an estimate of the obligation that is sufficiently reliable to use in recognising a provision. 26. In the extremely rare case where no reliable estimate can be made, a liability exists that cannot be recognised. That liability is disclosed as a contingent liability (see paragraph 86). Contingent liabilities 27. An entity shall not recognise a contingent liability. 28. A contingent liability is disclosed, as required by paragraph 86, unless the possibility of an outflow of resources embodying economic benefits is remote. … 30. Contingent liabilities may develop in a way not initially expected. Therefore, they are assessed continually to determine whether an outflow of resources embodying economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognised in the financial statements of the period in which the change in probability occurs (except in the extremely rare circumstances where no reliable estimate can be made). … Measurement Best estimate 36. The amount recognised as a provision shall be the best estimate of the expenditure required to settle the present obligation at the balance sheet date. 37. The best estimate of the expenditure required to settle the present obligation is the amount that an entity would rationally pay to settle the obligation at the balance sheet date or to transfer it to a third party at that time. It will often be impossible or prohibitively expensive to settle or transfer an obligation at the balance sheet date. However, the estimate of the amount that an entity would rationally pay to settle or transfer the obligation gives the best estimate of the expenditure required to settle the present obligation at the balance sheet date. 38. The estimates of outcome and financial effect are determined by the judgement of the management of the entity, supplemented by experience of similar transactions and, in some cases, reports from independent experts. The evidence considered includes any additional evidence provided by events after the balance sheet date. 39. Uncertainties surrounding the amount to be recognised as a provision are dealt with by various means according to the circumstances. Where the provision being measured involves a large population of items, the obligation is estimated by weighting all possible outcomes by their associated probabilities. The name for this statistical method of estimation is ‘expected value’. The provision will therefore be different depending on whether the probability of a loss of a given amount is, for example, 60 per cent or 90 per cent. Where there is a continuous range of possible outcomes, and each point in that range is as likely as any other, the mid-point of the range is used. … 40. Where a single obligation is being measured, the individual most likely outcome may be the best estimate of the liability. However, even in such a case, the entity considers other possible outcomes. Where other possible outcomes are either mostly higher or mostly lower than the most likely outcome, the best estimate will be a higher or lower amount. For example, if an entity has to rectify a serious fault in a major plant that it has constructed for a customer, the individual most likely outcome may be for the repair to succeed at the first attempt at a cost of 1,000, but a provision for a larger amount is made if there is a significant chance that further attempts will be necessary. … Risks and uncertainties 42. The risks and uncertainties that inevitably surround many events and circumstances shall be taken into account in reaching the best estimate of a provision. 43. Risk describes variability of outcome. A risk adjustment may increase the amount at which a liability is measured. Caution is needed in making judgements under conditions of uncertainty, so that income or assets are not overstated and expenses or liabilities are not understated. However, uncertainty does not justify the creation of excessive provisions or a deliberate overstatement of liabilities. For example, if the projected costs of a particularly adverse outcome are estimated on a prudent basis, that outcome is not then deliberately treated as more probable than is realistically the case. Care is needed to avoid duplicating adjustments for risk and uncertainty with consequent overstatement of a provision. … Future events 48. Future events that may affect the amount required to settle an obligation shall be reflected in the amount of a provision where there is sufficient objective evidence that they will occur. 49. Expected future events may be particularly important in measuring provisions. For example, an entity may believe that the cost of cleaning up a site at the end of its life will be reduced by future changes in technology. The amount recognised reflects a reasonable expectation of technically qualified, objective observers, taking account of all available evidence as to the technology that will be available at the time of the clean-up. Thus it is appropriate to include, for example, expected cost reductions associated with increased experience in applying existing technology or the expected cost of applying existing technology to a larger or more complex clean-up operation than has previously been carried out. However, an entity does not anticipate the development of a completely new technology for cleaning up unless it is supported by sufficient objective evidence. … Expected disposal of assets 51. Gains from the expected disposal of assets shall not be taken into account in measuring a provision. 52. Gains on the expected disposal of assets are not taken into account in measuring a provision, even if the expected disposal is closely linked to the event giving rise to the provision. Instead, an entity recognises gains on expected disposals of assets at the time specified by the Standard dealing with the assets concerned. … Disclosure … 86. Unless the possibility of any outflow in settlement is remote, an entity shall disclose for each class of contingent liability at the balance sheet date a brief description of the nature of the contingent liability and, where practicable: (a) an estimate of its financial effect, measured under paragraphs 36-52; (b) an indication of the uncertainties relating to the amount or timing of any outflow; and (c) the possibility of any reimbursement. … 89. Where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the balance sheet date, and, where practicable, an estimate of their financial effect, measured using the principles set out for provisions in paragraphs 36-52. …”
“Is the Contingent Payment payable even if there is no full redemption [i.e. of the bonds] on final maturity – see 6(j) [?]”
“Is this [i.e. the Contingent Payment] payable even if they [i.e. Elektrim and Elektrim Finance] default on the final maturity date?”
“Is the Contingent Payment due even if the bonds are not redeemed in full on the Final Maturity Date?”
“The Contingent Payment is a separate payment obligation owed to Bondholders, separate from the obligation to repay principal [i.e. the obligation to redeem the bonds]. The Contingent Payment would technically be repayable even if the Issuer [i.e. Elektrim Finance] defaulted on the principal repayment.”
“Article 8. The transfer, pledge and any other disposal of a share in the Company or a part thereof or other interest therein (herein after referred to as the “Transfer”) by a shareholder shall require the prior consent of the Supervisory Board. … The Supervisory Board may establish procedures which require the Party intending to transfer the interest to first offer the interest to the remaining Parties. If such procedures have been established, the Supervisory Board may require the Party intending to transfer the interest to first comply with such procedure before granting the consent. … Article 16: Call Option, Material Default, Damages 16.1 Each Party (each a “Grantor”) hereby irrevocably offers to the Operational Parties the right to purchase the shares in the Company owned by the Grantor (the “Option Shares”) at the price determined in accordance with Article 16 (3) hereof (the “Call Option”). The foregoing offer shall be subject to the condition that one of the following events has occurred: (a) A Grantor admits in writing, that it has materially defaulted, or (b) an arbitration court issues a declaratory award finding that such Grantor is in material default. … 16.3 The price to be paid to a Party for the Option Shares shall be (i) such Party’s proportional share in the net asset value of the Company (assets minus liabilities including loans granted by any of its shareholders but not including the share capital and any profit or loss carry forwards) as determined in the audited financial statements of the Company for the last completed fiscal year plus (ii) all of such Party’s capital contributions made after the date of such financial statements and not reflected therein. Payment becomes due 30 days after the Option Shares have been transferred.”
“Outcome of Arbitrations (i) In the event that [ET] is required, as a result of any final enforceable order in the Arbitrations or in any proceedings in relation thereto, to transfer any PTC shares to Elektrim, then Elektrim agrees that to the extent that there is no further order in either of the Arbitrations requiring the transfer of any shares to DT, it will retransfer all PTC shares held by it back to [ET] at a price (whether nominal or otherwise) and in a manner and at a time to be determined by Vivendi in its absolute discretion. Until Elektrim has transferred its PTC shares to [ET] as required by Vivendi, Elektrim agrees to hold such PTC shares on trust for [ET] and further agrees (a) not to seek to sell, agree to sell, transfer, encumber, or otherwise dispose of or create any interest in the PTC shares, and (b) to exercise all voting and any other rights attached to the PTC shares (including making all appointments to PTC’s Supervisory and Management boards as well as any other PTC committees) strictly on [ET]’s instructions which shall be obtained before any such rights are exercised. (ii) In the event that [ET] is required, as a result of any final enforceable order in the Arbitrations or in any proceedings in relation thereto, to transfer any of its shares in PTC to DT and Elektrim receives consideration for such transfer either directly from DT or indirectly through the other Respondents named in the PTC arbitration any such consideration shall be paid directly and immediately to [ET].”
“Elektrim’s supervisory board approval required”
“The Registration Court’s decision in the matter of PTC On2 February 2005 the Regional Court in Warsaw issued a decision on recognising the effectiveness of the [November 2004 Vienna Award]. On the basis of this decision, on24 February 2005 the District Court for the Capital City of Warsaw 19th Division of the National Court Register issued a decision on amending the commercial registry entry of the company Polska Telefonia Cyfrowa Sp. z o.o (PTC). The court’s decision included the following changes: 1. deletion of [ET] and entry in its place of Elektrim S.A. as a significant shareholder in PTC possessing 226,080 shares in PTC; 2. deletion of the following members of the Supervisory Board: Dariusz Oleszczuk, Michel Picot, Phillippe Houdouin and Jacek Nieweglowski and entry in their place of: Henryk Sobierajski, Dominik Libicki, Jozef Birka and Piotr Nurowski; 3. deletion of the following members of the Management Board: Boguslaw Kulakowski, Ryszard Pospleszynski and Honathan Eastick and entry in their place of Tadeusz Kubiak, Tomasz Holec and Andrzej Sykulski. Piotr Nurowski became Chairman of the Supervisory Board, Michael Gunther its Deputy Chairman and Dominik Libicki its Secretary. The Management Board composed as follows became the only body authorised to represent PTC in accordance with the provisions of the law: Tadeusz Kubiak – Director General Wilhelm Stuckemann – Director for Network Exploitation Martin Schneider – Director for Strategy, Marketing and Sales Tomasz Holec- Administration Director Andrzej Sykulski – Finance Director Towards the end of August 2005 the Local Court in Warsaw annulled the decision of the Regional Court dated24th February 2005 and sent the case for renewed consideration. On15 November 2005 the Registration Court made new changes in the National Court Register, entering [ET] as a shareholder in place of Elektrim S.A. In connection with the change in [PTC’s] entry in the National Court Register (KRS) Elektrim S.A. undertook legal action aimed at again having Elektrim S.A. entered in the KRS as the shareholder in PTC in accordance with the legally binding judgement of the Vienna Arbitration Court of26 November 2004 . This judgement is binding for all parties to the proceedings, including [ET]. In its judgement in the Arbitration Court unambiguous determined that Elektrim S.A. was and has remained at all proper times the owner of 48% of shares in PTC. That [ET] is bound by the judgement of the Vienna court has been confirmed by Polish courts, including the Appeal Court, which in its decision of11 May 2005 stated that it has direct legal consequences for ET and affects directly ET’s ownership rights. On29th March 2006 the Appeal Court in Warsaw rejected and dismissed [ET’s] appeal and the appeal of the Public Prosecutor against the Regional Court in Warsaw’s judgement of2 February 2005 . This means that the decision of the International Arbitration Court in Vienna of26 November 2004 is effective in Poland. The Appeal Court’s judgment is legally binding.”
“Significant events relating to past years which occurred after the balance sheet date and were not taken into consideration in the consolidated financial statements. On29 March 2006 , the Appeal Court in Warsaw rejected and dismissed [ET’s] appeal and also that of the Public Prosecutor against the decision of the Regional Court in Warsaw of2 February 2005 relating to the decision to recognise the effectiveness of the judgement of the Vienna Arbitration Court of November 2004. In its judgement the Arbitration Court stated that the sale of 48% of the shares in [PTC] to ET was ineffective and the shares in PTC, which were its subject, remained the property of Elektrim at every proper time. The Appeal Court’s decision means that the judgement of the International Arbitration Court in Vienna of26 November 2004 is effective in Poland. In view, however, of the complicated nature of all the matters connected to PTC these financial statements do not contain adjustments related to them. The most important events after the balance sheet date were described in Notes 39 and 29. The influence of events after the balance sheet date is difficult to assess. Apart from the above events and others described in these supplementary explanatory notes there were no events after the balance sheet date that were of significant importance and were not included in the financial statements.”
“In 2002-2003, the company board of directors underwent many changes and, as of the date of issue of the present report, we had not yet received the declarations of some former members of the board in connection with the audit of the group’s consolidated financial statements for previous periods. Accordingly, we cannot state whether as of the day of the present report the present members of the board are in possession of knowledge about all the major liabilities contracted, contingent liabilities, and transactions carried out by the company. In particular, for these reasons, the declaration of the company board of directors obtained during our audit in respect of the accuracy and integrity of the consolidated financial statement in the year ending on31 December 2005 was modified significantly. In the event of existence of major undisclosed contracted liabilities, contingent liabilities, and transactions up to31st December 2005 , their influence on the enclosed consolidated financial statement cannot be determined. At the same time, one of the law firms with which the company ceased working in 2005 did not respond to our question on the current status of the cases that the firm conducted for the company. Moreover, one of the law firms working for the company did not give us an update of its response as of the day of the present report. Accordingly, as of the day of the present report, we cannot comment on the subject of the possible consequences of the court cases and of their possible influence on the enclosed consolidated financial statement for the year ending31 December 2005 . Additionally, during the audit, the company did not release to us full minutes of the meetings of the company board of directors and supervisory board. In accordance with the declaration of the company board of directors, the board delivered to us all the documents and agreements in its possession regarding period audited, which are not subject to business confidentiality. In accordance with the declaration of the company board of directors, the documents that have not been released to us represent the company’s business secrets. Accordingly, as of the day of the present report, we cannot comment on the subject of the possible influence of our unresolved issues on the enclosed consolidated financial statement for the year ending on31 December 2005 . Moreover, on the basis of information obtained from the company, we could not affirm all the information included in the additional explanatory notes to the enclosed consolidated financial statement.”
“Having found for [Elektrim on the relevant Polish law in relation to penalties], the Arbitral Tribunal is not yet in a position to determine how the reduction of the penalty which is included in Article 16 (3) of the Shareholders Agreement will affect the determination of the price. The tests that will guide the Arbitral Tribunal in examining that question for a further determination in the next substantive award are likely to be as follows: * The common will and intent of the Parties at the time of entering into the contract which contains the penalty. * The dolus directus of Elektrim when transferring control of PTC to Vivendi and a certain violation of the Shareholders Agreement when introducing a foreign partner as a controlling partner without DT’s consent. * The exact or approximate damage which has been incurred by DT as a result of Elektrim’s conduct. * The difference between the book value and the fair market value of the shares.”
“The Parties hereby clarify and confirm, that [DT] has validly exercised the Vienna Call Option for the Shares (as decided by the Second Vienna Tribunal). Elektrim confirmed in writing to the management board of PTC that [DT] has acquired title to the Shares and has provided [DT] with a copy thereof at the date of this Agreement which is attached hereto as Annex 2.4.”
“In other words, the Parties’ objective was (i) either to re-instate [ET’s] shareholding in PTC or (ii) to transfer to [ET] the consideration for the PTC shares to be paid by DT.”
“1. The legal burden lies on the plaintiff to prove that in losing the opportunity to pursue his claim he has lost something of value, i.e. that his claim…had a real and substantial rather than a merely negligible prospect of success. 2. The evidential burden lies on the defendants to show that despite their having acted for the plaintiff in the litigation and charged for their services, that litigation was of no value to their client, plainly the burden is heavier in a case where the solicitors have failed to advise their client of the hopelessness of his position. If, of course, the solicitors have advised their client with regard to the merits of his claim such advice is likely to be highly relevant. 3. If and in so far as the court may now have greater difficulty in discerning the strength of the plaintiff’s original claim…than it would have had at the time of the original action, such difficulty should not count against him, but rather against his negligent solicitors. 4. If and when the court decides that the plaintiff’s chances in the original action were more than merely negligible, it will then have to evaluate them. That requires the court to make a realistic assessment of what would have been the plaintiff’s prospects of success had the original litigation been fought out. Generally speaking one would expect the court to tend towards a generous assessment given that it was the defendants’ negligence which lost the plaintiff the opportunity.”
“… it may be that the court [i.e. the court considering the claimant’s loss of opportunity damages claim] would not think it right to assess the likely level of damages which would be awarded and then apply a single fraction to those damages. The court may think that, although there is only one cause of action, the claimant would, if successful, stand a very good chance of recovering, say, one of the two heads of damages which he seeks, but a significantly poorer prospect of recovering the other head of damages. In such a case, I would have thought that the court would think it right to apply a higher discount to the second head of damages than to the first.”
“100. Before leaving this topic, I should like to discuss how the court should deal with a pure question of law which might have arisen in the action. For instance, in a case such as the present, assuming that the claimants establish that, on the balance of probabilities, they would have maintained the action against Touche Ross, and that there was a real chance of recovering substantial damages from Touche Ross in the action, the question whether a certain head of damage would have been recoverable from Touche Ross may well turn on whether, as a matter of law (if all the relevant facts are clear) a certain head of damage would have been recoverable. Should the court assessing the damages for loss of the chance resolve that issue of law or, provided that it is satisfied that there is a real argument both ways on the issue, should the court award something for loss of this particular head of damage, but, because there was a prospect of the head of damage failing in law, should a further discount be applied to that head of damage? 101. In my judgment, the proper approach to the court to an issue of law which would have arisen in the action, which the claimant has been deprived of the opportunity to bring, is the same as in relation to an issue of fact or opinion which the claimant would have established in the action. However, at least in general, the court should in my judgment be far more ready to determine that the claimant would have failed or succeeded on a point of law than to determine that the claimant would have failed or succeeded on a point of fact or, even, opinion. That conclusion appears to me fair and practical, as well as consistent with the approach of the Court of Appeal in the three cases to which I have referred (albeit that they are not, as I have mentioned, determinative of this issue). 102. Indeed, where the defendant to a loss of a chance claim raises a point of law which, if correct, would have defeated the action, interesting issues can arise. For instance, a Judge at first instance determining a claim for repayment of money paid under a mistake of law prior to the decision of the House of Lords in Kleinwort Benson v Lincoln City Council [1998] 4 All E.R. 513, would have been bound to dismiss the claim. However, I do not think that it follows that, faced with a claimant contending that, through the defendant’s negligence he had been deprived of the opportunity to pursue an action for the recovery of money paid under a mistake of law, such a judge would have been constrained to dismiss the claim. However, I do not think that it follows that, faced with a claimant contending that, through the defendant’s negligence, he had been deprived of the opportunity to pursue an action for the recovery of money paid under a mistake of law, such a judge would have been constrained to dismiss the claim: he would have been entitled to take into account the prospect of the House of Lords entertaining an appeal in the action and changing the law (as in fact it did in Kleinwort Benson). Because the issue did not arise, there is little assistance on this point in any of the cases to which I have referred. It is true that in Mount, the claim failed because the court formed the view that the claimant would have failed in his action as a matter of law, but, as I read the judgments, the court would have reached that conclusion on either approach (bearing in mind that, even if the court was considering the issue on the loss of a chance basis, it was of the view that the claimant’s prospects of success were so poor that, in that event, he did not lose anything of value). 103. However, it is, I think, arguably implicit in the third and fourth numbered principles in the judgment of Simon Brown LJ in Mount that, at least in an appropriate case, it is right to assess damages on the loss of a chance basis even where the issue in the action would be one of law. At the end of his third numbered paragraph, Simon Brown LJ said that the assessment of the claimant’s claim may not be more difficult than in the action itself where the original claim turned on questions of law or the interpretation of documents; his fourth numbered paragraph … seems to apply to all types of case encompassed within the previous paragraph. However, it would be wrong for me to place much weight on that, because, as I have mentioned, it does not seem to me that the Court of Appeal in Mount has to consider the aspect which I am now discussing.”
“This model has been prepared on the basis of the assumptions submitted by PAK for whose accuracy PwC assumes no responsibility”
“Taking into account that the costs of services provided by the [PAK subsidiary] companies (refurbishment, maintenance and warehouse management) in the budget of [PAK’s] Production Department declined by PLN 7.8m and the budget increased by PLN 18.1m when compared with 2004, the Production Department’s costs have increased by almost PLN 25.9m”
“Czech electricity prices are still some 35% lower than in the German market, so the convergence argument remains intact”, supporting the view that the company had “positive long term prospects”); iii) The EU Commission required Poland to unwind the PPAs, and in 2005 the Polish government introduced legislation to achieve that. It was likely that this would have the effect of allowing the electricity prices which could be achieved by PAK’s three existing power stations to rise; iv) Poland’s stock of electricity generating plants was ageing and would have to be replaced. The EU Commission issued a letter to the Polish government dated23 November 2005 regarding the government’s proposal for legislation to unwind the PPAs. In that letter, the Commission observed: “The price development hypotheses adopted by the Polish authorities to calculate maximum compensation to invalidate the PPA [i.e. compensation payable to electricity producers which were encouraged to invest against the guaranteed receipts set out in PPAs, and which therefore incurred costs of investment referred to as “stranded costs”] are based on a scenario, which presents a slow rise of the average market price for electricity. This average market price remains below generally accepted costs for the best new market participant, which utilises a CCGT type power plant (approx. EUR 36/MW) up to 2016. The Commission is aware that the best new participant on the Polish market may choose to use technology based on burning coal, where, according to the Polish authorities, the costs may vary somewhat between EUR 30 and 35/MW. Although, the hypothesis regarding average price development in Poland anticipates that these prices will also remain below that range for a long period of time, at least until 2015. Thus the Commission has serious doubts whether the hypothesis adopted by the Polish authorities to calculate the maximum stranded costs compensation are consistent with the necessity to ensure new participants’ ability to enter the market, pursuant to [the Commission’s standard methodology and practice] in this area….”
“A renewed right bank of central Warsaw will come nearer to the Vistula river particularly in the area of Port Praski. The system of canals and locks in this area will be modernised. A new district of offices, apartments and shops will arise. The canals, proximity to the river and green areas will determine its unique attractiveness.”