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:
Did the trial judge misinterpret "HSR Approval"?
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.