Rectification: When What Is Written On Paper Does Not Reflect The 'True Agreement'

Tartsinis v. Navona Management Company [2015] EWHC 57 (Comm)

When a contract does not reflect the common intention of the parties, equitable relief can be sought from the Court for the contract to be rectified. Such relief is however rarely granted. This dispute provides us with an example where it was.

The background facts

Two Greek businessmen, Mr. Tartsinis and Mr. Nikolaou, had agreed to sell their shares in a company which owned a fleet of ships to Navona Management Company ("Navona"). This agreement was contained in a Share Transfer Agreement ("STA").

The dispute arose over the price mechanism for the shares set out in the STA. According to the STA, the Net Asset Value ('NAV") of the company was to be calculated based on the value of the fleet.

Mr. Tartsinis' position was that the fleet value referred to in the STA was clearly agreed to be provisional until the delivery date accounts were issued and, therefore, a sum of over US$13 million remained payable by Navona after the completion of the sale of the...