The High Court has refused to intervene in advance in a dispute over an earn-out payment following the sale of Wicklow-based food-truck manufacturer Reward Catering Limited to Swedish group Teqnion AB.
Sunward Holdings sold the entire share capital of Reward Catering to Teqnion under a share purchase agreement dated August 31, 2022. It received €5.2 million upfront, with provision for three additional earn-out payments. The first, worth €3 million, was paid.
The current dispute concerns the second earn-out period, covering September 2023 to August 2024. Teqnion calculated the relevant gross profit after excluding six invoices raised in August 2024 for trucks which were not delivered until September. On that approach, Sunward would receive €222,754.
Sunward says Reward Catering historically recognised revenue when products were completed and invoiced rather than when delivered. If the six invoices are included, it says the earn-out would be €2,186,942.40.
The parties agreed that disputes over adjustments to the earn-out statement would be referred to an independent expert. They selected PwC partner Deirdre McGrath. However, before that process began, Sunward brought Commercial Court proceedings seeking a declaration concerning how the expert should interpret the contractual definition of “Gross Profit”.
Mr Justice Twomey refused the application. Relying on Supreme Court authority, he held that courts should generally respect agreements to use expert determination and should not intervene before an expert has made a decision unless exceptional circumstances arise.
The judge said the expert is entitled to interpret and apply the contract herself. If she later acts outside her mandate, a court remedy may then be available.
The ruling does not decide which party is correct about the six invoices or what earn-out is ultimately payable. Those questions remain for the agreed expert process.
The court’s preliminary view was that Sunward should pay Teqnion’s legal costs of successfully defending the application.