Background

• Transaction:
  • In 2015, Superior agreed to acquire Canexus, subject to regulatory approval under Canadian and U.S. competition laws.
  • The deal failed, and Canexus was later acquired by Chemtrade.
  • The dispute centered on whether Superior owed a $25 million Reverse Termination Fee, triggered if both Competition Act Approval and HSR Approval were not obtained before the Outside Date (June 29, 2016).
• Trial Decision:
  • The Alberta Court of King’s Bench ruled that Superior owed the fee, finding that HSR Approval was not obtained.

Court of Appeal Decision

• Key Issues on Appeal:
  1. Did the trial judge misinterpret "HSR Approval"?
  2. Did both Competition Act and HSR Approval need to be obtained to avoid the fee?
• Findings:
  • The Court found palpable and overriding error in the trial judge’s interpretation of HSR Approval.
  • HSR Approval was obtained on June 28, 2016, when the parties’ timing agreement with the U.S. regulator expired.
  • The trial judge improperly relied on subjective negotiation evidence, contradicting the contract’s plain wording.
  • Because HSR and Competition Act Approval were both obtained, no fee was payable.
• Outcome:
  • Appeal allowed; trial judgment overturned.
  • Canexus’s claim for the $25 million Reverse Termination Fee was dismissed.
  • No monetary award specified.