NJORD Case Law News: The Senate Has Adopted A Judgment On The Legal Nature Of A Preliminary Contract

• Published date: 30 August 2023
• Law Firm: NJORD Law Firm
• Author: NJORD Law Firm

On 5 July 2023, the Senate of the Republic of Latvia adopted a judgment in case No. SKC-19/2023, where the Senate considered such issues as the legal nature and essence of a preliminary contract (in Latvian - "priekaligums"), the right to claim performance of a preliminary contract and to combine such a claim with a claim for performance of the main contract.

In the main proceedings, the insolvency administrator of the insolvent JSC "Rigas Vagonbuves rupnica" brought an action in court against JSC "Pasazieru vilciens", seeking, inter alia, that the parties' contract for the purchase of 49% of the shares in JSC "VRC Zasulauks" be recognised as concluded, that the value of the shares be fixed at EUR 905 340 and that the defendant be ordered to pay the value of the shares in favour of MAS "Rigas Vagonbuves rupnica". The parties had signed a shareholders' agreement (the "Agreement") on the purchase of the shares from the claimant, stipulating, inter alia, that the value of the shares to be sold, to be determined by an independent valuer, should be as high as possible and "should be in line with the parties' understanding at the time of its amount of approximately EUR 700 000, taking into account the value of the company's total assets, the...