CL-2022-000456 - [2025] EWHC 1938 (Comm)

The position in Switzerland arose because EuroChem AG is incorporated in Switzerland. The NCA in Switzerland is the State Secretariat for Economic Affairs (“SECO”). It is common ground that the SECO has accepted EuroChem AG’s firewalls, in relation to EuroChem AG.

On 14 November 2024, EuroChem AG wrote to the SECO seeking confirmation that no specific authorisation was required from the SECO for the Assignment. On 27 November 2024, the SECO confirmed that it had no objection provided that EuroChem AG complied with its firewall commitments.

I should say that I understand this confirmation to relate only to EuroChem AG’s entering into the Assignment – not to its performance of the Assignment; in particular, not to the payment of the agreed consideration of US$62,358,000 to EuroChem NW2. In its letter of 14 November 2024, EuroChem AG did not in fact inform the SECO of the amount of the consideration, nor of the full terms of the Side Letter, so it cannot have been expecting authorisation to pay, as opposed to authorisation to enter into the Assignment.

The payment of such a substantial sum to a non-EU subsidiary, which is not behind the firewall and which (as I have found, and on the basis of Mr Hechler’s evidence EuroChem AG knows no different) is controlled by a designated person, in circumstances where the payment does not take place in the course of the ordinary business of either company, must require specific authorisation. Such payment would not comply with EuroChem AG’s firewall commitments, as EuroChem AG must be well aware. I come back to this in Sections LXV and LXVI below.

In any event, clause 2.2(b) of the Assignment Side Letter provides that the consideration of US$62,358,000 will only be payable when “all the necessary Governmental Authority approvals are obtained if required for such payment”. Mr Fenwick KC told me that EuroChem AG will not pay the consideration to EuroChem NW2 unless and until it has applied specifically for approval to do so. Given the views that I have expressed in the preceding paragraph, I was not surprised to be told this. It would be extremely foolish of EuroChem AG to pay the consideration without having sought specific approval.