RMK Maritime (Europe) Ltd & Anor v CMB.TECH NV

INTRODUCTION

In this action, the Claimants (collectively, “RMK”) bring a restitutionary claim for US$11,677,600 in respect of mergers and acquisitions (“M&A”) advisory work carried out in respect of the merger of Euronav NV (as the Defendant was formerly known) (“Euronav”) and Gener8 Maritime Inc. (“Gener8”) in 2018.

RMK says that the services it provided in connection with that transaction went beyond the scope of the parties’ written agreement. The dispute centres on the interpretation of that agreement, the extent to which it leaves room for any restitutionary claim of the kind RMK advances, the nature and extent of RMK’s role during the transaction, the basis on which any additional remuneration might be claimed, and (if relevant) the proper valuation of the services said to have been rendered in addition to those required under the written agreement.

I heard evidence (factual and expert) and argument over the course of a nine-day trial, during which I was referred to many of the hundreds of documents passing between the parties during a period of about two years. For the reasons set out in this judgment, I have concluded that:-

OVERVIEW OF PARTIES AND CLAIMS

The First Claimant, RMK Maritime (Europe) Limited (“RMK UK”), is a company incorporated in England and Wales. At all material times, it operated as a small firm providing advisory and capital-raising services in the maritime sector. It was controlled by Richard Moore.

The Second Claimant, RMK Maritime Capital LLC (“RMK Capital”), is a company incorporated in the State of Delaware in the United States of America. It is affiliated with RMK UK and was controlled by Michael Kirk.

Together, RMK UK and RMK Capital operated under the name “RMK Maritime”.

RMK UK has a paid-up share capital of £100 and, at the material time and to date, has filed unaudited accounts pursuant to the small companies’ exemption under section 477 of the Companies Act 2006. Mr Moore was its sole director. As at 31 December 2021, RMK Capital had total net assets of US$99,718.

The parties disagreed about whether RMK UK was, at the material time, licensed to provide investment banking services in the UK. RMK Capital was registered as a broker-dealer in the US with the Securities Exchange Commission and the Financial Industry Regulatory Authority.

The RMK team involved in the transaction comprised Mr Kirk and a junior colleague, Ms Emily Motyka, with a further junior hire, Mr Keros, joining in September 2017.

The Defendant, Euronav, is a company incorporated in Belgium. At the relevant time, it was known as Euronav NV. Euronav is one of the world’s largest operators of crude oil tankers. Euronav became part of the merged entity following its merger with Gener8 in 2018.

At the time of the merger: (1) Euronav and Gener8 were both among the largest crude oil tanker operators globally; (2) Euronav was dual-listed on the New York Stock Exchange and Euronext Brussels; and (3) Gener8 was listed on the NASDAQ stock exchange in the United States.

At the relevant time, Euronav’s Chief Executive Officer was Mr Paddy Rodgers, and its Chief Financial Officer was Mr Hugo de Stoop.

RMK brings a claim in restitution for quantum meruit, alleging that Euronav was unjustly enriched by the receipt of services which, RMK contends, fell outside the scope of an Advisory Agreement between RMK and Euronav dated 19 July 2016 (“the Advisory Agreement”).

RMK’s case is that it was engaged under the Advisory Agreement to provide limited services, principally the development of an acquisition model to assist Euronav in studying a possible acquisition of Gener8. RMK contends that, over the course of the transaction, it went on to provide a broader range of M&A advisory services (including deal structuring, valuation advice, negotiation support, and due diligence coordination) which were not within the scope of the Advisory Agreement. RMK alleges that these services were provided on the basis of a shared understanding that Euronav would pay a further fee, to be agreed or otherwise assessed at a reasonable market rate. RMK claims unjust enrichment, asserting that the basis for the provision of the additional services has failed and/or that Euronav freely accepted the benefit of those services with knowledge that RMK expected to be paid.

Euronav denies that any of the services provided by RMK fell outside the scope of the Advisory Agreement. It contends that the Agreement, properly construed, encompassed all of the services RMK performed, including those now characterised as “additional”. In the alternative, Euronav submits that even if some services were outside the contractual scope, RMK’s claim in unjust enrichment must fail as a matter of law. Euronav argues that the Advisory Agreement makes express provision for variation, by agreement in writing, of the scope of the services to be provided, as well as containing a “no oral modification” clause; and that permitting a restitutionary claim in respect of extra-contractual services would impermissibly circumvent the contractual framework. Euronav further contends that there was no joint understanding that RMK would be entitled to a further fee for any additional services, and that any suggestion of further payment was always understood to be discretionary. Euronav also disputes the quantum of RMK’s claim, asserting that the services were not of the value claimed and that RMK’s expectations were unrealistic and unsupported by market practice.

WITNESSES OF FACT

Mr Michael Kirk is the co-founder of RMK and was the main individual responsible for RMK’s involvement in the Euronav/Gener8 transaction. He was in general a good witness and, for example, he showed notable candour on several occasions about points he could not remember or which might be adverse to RMK’s case. There were, at the same time, some other occasions where I felt that, in his written or oral evidence, he was overstating RMK’s role in the transaction as compared to Euronav’s (for example the suggestions that Euronav was out of its depth, and that RMK advised on the best way of dealing with the loan rollover issue discussed later).

Mr Moore is the co-founder of RMK, and gave evidence about RMK’s role in the transaction, the nature of the work performed and certain conversations with Euronav.

His evidence was somewhat curious, in that in his trial witness statement, dated 4 October 2024, he said (among other things) that in discussions with Mr Rodgers before the Advisory Agreement was entered into, he pitched RMK’s ability to provide initial analytical work to see whether acquiring Gener8 was a viable project, and that “[a]t this stage we only pitched for the analytical work as Paddy Rogers appeared to consider it would be a straightforward transaction and that Euronav could perform the majority of the work themselves if it moved forward from a hypothetical ‘study’ of a potential deal into a transaction”. He said RMK was happy to be involved on that basis as it would be a foot in the door to securing the full investment M&A work.

However, in a further (fourth) witness statement signed on 7 May 2025, the day before he gave oral evidence, Mr Moore said that in the run-up to trial he had reviewed the documents from 2016 leading up to the signing of the Advisory Agreement, and noticed that the account set out in his previous statement was “not entirely accurate”. On the topic mentioned above, he said “the true position is that Mike and I were pitching RMK to be a full M&A advisor to Euronav in respect of the possible acquisition of Gener8, but Euronav only wanted to instruct us in a more limited role”. He continued to say that RMK was content with this on a ‘foot in the door’ basis.

Yet when Mr Moore was asked about this in cross-examination, he appeared to maintain that the passage in his trial witness statement was in fact correct: it simply set out what happened after RMK had pitched for the full M&A role and had been rebuffed. He said:-

“A. The statement reflects the context -- that was my intention -- that after we had been rebuffed from the -- applying for the full M&A work, that we were pushed into only being able to provide initial analytical work, and that's initial analytical work for the transaction. But that was very much after the full M&A advisory pitch had been rebuffed.” (Day 3/99-100)

I find it difficult to see how the two versions of Mr Moore’s evidence can be reconciled, and indeed he himself evidently thought them different when he said in his fourth witness statement that his earlier evidence was not entirely accurate. In my view these matters give rise to some doubt about the care and/or seriousness with which he approached the giving of his evidence (written and oral), and in any event about the reliability of his recollection.

Ms Motyka was an analyst at RMK. She did not give oral evidence at trial. Her evidence was admitted under the Civil Evidence Act 1995. Ms Motyka described her role in supporting Mr Kirk and others at RMK in the preparation of the acquisition model, Board Books, and Pitchbooks.

Mr Keros was an employee of RMK for two and a half years until March 2020. He did not give oral evidence. His statement was admitted under the Civil Evidence Act 1995. Mr Keros described his involvement in the debt rollover process and in preparing financial models for KEXIM and other lenders.

Mr Smith was a director of Gener8. He did not give oral evidence. His statement was admitted under the Civil Evidence Act 1995. Mr Smith gave evidence about the 17 August 2017 meeting to which I refer later, and his understanding of RMK’s role in the transaction.

Mr Paddy Rodgers was the Chief Executive Officer of Euronav during the relevant period. Mr Rodgers was involved in the negotiation of the Advisory Agreement and in subsequent discussions with RMK regarding its role and remuneration.

Mr Rogers was not an entirely satisfactory witness. Particularly in the earlier stages of his oral evidence, he had a tendency to seek to argue the case, sometimes embarked on long answers not properly directed to the question asked, and on occasion failed to answer straightforward questions until reminded of his duties as a witness (for example in the exchanges I quote in § 36 below). On the other hand, he was candid about the limits of his recollection, and I did not at any stage form the impression that he was not giving truthful evidence.

Mr Hugo de Stoop was the Chief Financial Officer of Euronav during the relevant period and later became its Chief Executive Officer. He was the primary point of contact for RMK throughout the transaction.

In general Mr de Stoop gave his evidence carefully and precisely. On a couple of occasions he made remarks which suggested he was sparring with the cross-examiner, for example by thanking the questioner for raising a matter or referring to a particular document, and this slightly detracted from the effect of his evidence. On the whole, though, over the course of a long and detailed cross-examination, I felt confident that he was providing his recollections to the best of his ability.

EXPERT EVIDENCE

Mr Colin Knight was instructed on behalf of the Claimants. He is a financial consultant with a background in investment banking, risk management, and M&A advisory. He provided two expert reports and participated in a joint memorandum with Mr Frank Pedder.

In cross-examination, Mr Knight was challenged on the recentness of his direct M&A experience. He accepted that his last direct M&A role was over two decades ago. When asked why his report did not reference any recent M&A transactions, he responded that he had remained engaged with M&A through reading and trading activities, including merger arbitrage. He acknowledged that his last direct experience dated back 24 years and that his more recent involvement was indirect.

Although I have no doubt that Mr Knight was expressing his genuinely-held views, I felt that at several points in his written and oral evidence he strayed beyond his proper role. Examples were evidence about what role Euronav envisaged RMK having, whether Mr De Stoop had ‘underestimated’ the amount of advisory work involved in the transaction, and whether Euronav had acknowledged that RMK was doing work beyond the scope of the Advisory Agreement. Mr Knight in cross-examination sought to explain these points by saying he had been attempting to add “colour” and explain what was going on. In my view, he did go clearly beyond his proper role in putting forward that evidence.

Mr Frank Pedder was instructed on behalf of the Defendant. He is a financial expert with experience in corporate finance and M&A advisory, particularly in the maritime sector. He provided two reports and participated in the joint expert meeting. He was an excellent witness, providing his evidence in a candid, clear, fair, logical and straightforward manner.

FACTUAL NARRATIVE

Mr Moore and Mr Kirk, on the one hand, and Mr de Stoop and Mr Rodgers, on the other, had developed a working relationship in the years preceding the events giving rise to this dispute. Mr Rodgers had arranged for RMK UK to rent office space within Euronav’s London premises, resulting in regular contact between the parties.

Prior to the Gener8 transaction, Euronav had engaged RMK in connection with two transactions. The first was a capital raise in 2013, in which Euronav sought to raise US$150 million to refinance an expiring convertible bond (the “2013 Capital Raise”). RMK introduced Euronav to two private equity investors and facilitated the potential raising of the full amount sought. Euronav ultimately required only a portion of the capital from one of RMK’s investors, namely US$25 million, Euronav’s shareholders having agreed to invest the majority of the funds needed. However, Euronav nonetheless paid RMK US$1 million for the introductions.

There was some disagreement about the basis on which that fee was paid. Mr Rodgers and Mr de Stoop said in their witness statements that Mr Rodgers negotiated a fixed fee of US$ 3.5 million, which was US$ 1 million less than the 3% percentage fee RMK had proposed (based on raising capital of US$ 150 million); and Mr Rodgers added that he knew that Euronav’s board would not have looked to enter into an agreement to remunerate RMK on a percentage basis. Mr Kirk stated that there had been an engagement letter and agreement for fee of 3% of the capital raised, which would have been US$ 750,000 based on the US$ 25 million its investor ultimately put in, but that Mr Rodgers asked RMK to invoice for US$ 1 million otherwise RMK would have been underpaid.

The documents indicate that RMK had proposed a fee of 3% of capital raised, including in a draft engagement letter sent to Euronav on 16 December 2013. However, no written agreement appears to have been signed. On 2 January 2024 RMK sent Euronav an invoice for US$ 1 million, which Mr de Stoop replied would need to be approved by Mr Rodgers and himself. Mr de Stoop in cross-examination accepted that Euronav agreed to pay that amount. He appeared to say in cross-examination that there had been an agreed fixed fee of US$ 3.5 million for raising US$ 150 million, but that as only US$ 25 million was needed the parties agreed on a reduced fee of US$ 1 million. Mr Rodgers, in the following somewhat unsatisfactory piece of oral evidence, eventually accepted that a US$ 1 million fee had been agreed:-

“Q. Don't worry about comes later. I am asking you this is what was agreed at the turn of the year would be their fee for the capital raised. Isn't that right?

A.

That's what they billed us for.

Q. That is what was agreed by you with them as the fee for the capital raise, isn't that right?

A. That's what they billed.

MR JUSTICE HENSHAW: You're not answering the question.

A. I'm not answering the question, no, because obviously you'll --

MR JUSTICE HENSHAW: No, you have to answer the question. So try again.

A. I'm sorry. That's what's been agreed.”

Euronav’s original evidence about a US$ 3.5 million fixed fee having been agreed was incorrect, and may well have been a confused recollection arising from the fact that, after the Maersk Tankers deal summarised below, Euronav asked RMK retrospectively to allocate fees of US$ 3.5 million in total to the capital raise.

I do not consider that the capital raise episode sheds much, if any, light on the issues to be decided. Contrary to both sides’ original evidence, it shows neither (a) Euronav agreeing to a percentage fee nor (b) Euronav resisting payment of a percentage fee. Exactly how the US$ 1 million figure was arrived at remains unclear.

The second transaction was a capital raise in early 2014 in relation to Euronav’s acquisition of 15 crude oil tankers from Maersk for US$980 million (“the Maersk Tankers Deal”), including assisting in raising debt and equity capital of US$ 550 million. There was no engagement letter, but Euronav agreed to pay RMK US$10 million for its role in the transaction. It appears the fee was agreed after the event. Mr Rodgers on 6 January 2014 emailed Mr de Stoop saying:-

“I was thinking we could pay three fees.

1.

Common equity raised on their connection;

2.

Mezz raised their connection;

3.

Book runner for whole raise excluding their connections;

4.

The rates for each would differ eg 3% for 1, 2% for 2. And 1% for 3.

Let talk it through tomorrow.

Paddy”

Mr Rodgers accepted in cross-examination that, in this email, he was adopting a percentage approach. It is not clear, however, that that reflected anything discussed between the parties, as opposed to an internal rationalisation by Euronav. Mr Rodgers’ evidence was:-

“Q. And that's because it's simply not true that Euronav would not have approached advisory fees or introductory fees only on the basis of a fixed fee. As is common in the market, you would approach them on the basis of percentage fees, isn't that correct?

A. The -- ultimately it's a question of whether you're going to use the percentage for the purposes of your discussion and internal communication and whether or not you're going to fix nominal amounts in terms of the contracts that you sign.”

On 21 January 2014, Mr de Stoop emailed RMK asking them (for invoicing purposes, and seemingly for Euronav’s own book-keeping purposes) retrospectively to allocate US$2.5 million of the Maersk Tankers deal remuneration to the earlier capital raise:-

“If possible I would suggest the following: Pref invoice increased from $1m to $3.5m (can you produce an invoice dated prior to 31/12 for $2.5m?) related to $150m capital increase Maersk equity would then become $7.5m and we are happy to receive only one invoice for that dated after year end but it must be labelled “in relation to $350m capital increase.”

Mr Moore told Mr de Stoop he was happy with this split. On 5 February 2014, RMK’s invoice for the Maersk Tankers deal was issued in the sum of US$7.625 million. (It is unclear why the invoice was for US$7.625 million rather than US$7.5million.)

Mr Rodgers in his witness statement said that, on reflection, he considered the fee excessive, and the board were particularly annoyed at him about it, but that Euronav had been under a lot of time pressure to get the Maersk deal done. However, in cross-examination he accepted that the fee was agreed after the deal was done, hence not under time pressure; that he had been enormously happy with the transaction and Mr Kirk’s role in it; and that he was happy to agree the fee of US$ 10 million, though it was an enormous amount of money to pay to “two people”.

Again, I consider this episode to shed no real light on later events.

In January 2015, following RMK Capital’s registration as a broker-dealer in the US, Euronav arranged for the investment bank managing its Initial Public Offering on the New York Stock Exchange to include RMK as a co-manager. RMK did not perform any work on the IPO and received no fee: its inclusion was a gesture of support.

Between late 2015 and early 2016, RMK, among others, began pitching the Gener8 transaction to Euronav. Gener8 had been formed in 2015 as the result of a merger between General Maritime and Navig8 Tankers, arranged by a group of hedge fund investors. Gener8’s shares traded at a significant discount to its net asset value (NAV). Mr Rodgers and Mr de Stoop said it was well known that its hedge fund shareholders were seeking a quick investment turnaround and would be interested in an opportunity to exit the investment. That meant there was an opportunity for Gener8 to be acquired by one of the other large tanker operators, and Frontline, International Seaways and COSCO showed interest in acquiring or merging with Gener8 prior to Euronav’s successful acquisition.

Euronav was approached by several advisory firms offering help on a potential acquisition of Gener8 by Euronav. For example, Wells Fargo approached Euronav in April 2016 to express interest in advising Euronav on the potential opportunity, saying that Wells Fargo was “putting together of how the financing might work and look forward to sharing that with you”. Analysts from UBS, Morgan Stanley and later Stifel sent Mr de Stoop copies of models that they had prepared for a Euronav acquisition of Gener8.

RMK similarly invested time creating its own model for the potential acquisition in order to pitch for the work, and a dialogue with Euronav began.

On 16 December 2015 Mr Rodgers emailed Mr Kirk, who was then his main point of contact with RMK, requesting information on the shareholders of Gener8, including details of the individuals and companies that held the major investment shareholdings. Later that day, Mr Kirk provided the requested information to Euronav.

On 14 January 2016, RMK sent a strategic presentation to Euronav regarding the potential acquisition, which at that time was known as Project Silverback but later became known as Project Liberate. Mr Kirk provided Mr Rodgers with vessel value prices for Suezmax tankers on 3 February 2016, which were relevant to the share price for the potential purchase of Gener8.

Mr Bryan Guadagno of RMK on 4 February 2016 sent Euronav a presentation (“on the information [Mr Rodgers] requested”), supplemented by supporting documentation, including reasons why RMK proposed that Euronav acquire Gener8 in a cash and stock (shares) transaction, and information about the advantages of the transaction for Euronav. An updated version of this presentation was provided by RMK on 12 February 2016.

On 23/24 March 2016, Mr Kirk met Mr Stoop in New York, where Mr Rodgers had invited Mr Kirk to an industry event, and they discussed the structure of the potential acquisition.

In early April 2016, RMK had discussions with Gener8 shareholders, followed by calls to Euronav. This included a discussion by telephone between Mr Kirk, Mr Guadagno and Mr Andrew Shohet of RMK and Mr Rodgers and Mr de Stoop on 8 April 2016. Also on 8 April 2016, RMK sent Euronav a further updated version of its presentation, showing the relative NAV metrics for Euronav and Gener8, and the companies’ leverage and share performance. Mr Kirk sent a follow up email the same day outlining RMK’s thoughts on the way forward for the acquisition. On 14 April 2016, Mr de Stoop wrote to Mr Kirk saying, “thanks for keeping the pressure on this file”, in addition to discussing the transaction and modelling questions. On 27 April 2016, Mr Kirk emailed Euronav to congratulate it on its Q1 earnings and provided an updated version of the presentation.

On 6 May 2016 Mr Kirk and Mr Moore met Mr Rodgers and Mr de Stoop in London to discuss details of Project Liberate, including whether the acquisition was of interest to Gener8 shareholders, at what price the acquisition should be pitched, and when a formal bid should be made. Mr Kirk followed up with emails and attachments setting out an acquisition proposal on 16 and 26 May 2016. At some stage during this process, Mr de Stoop requested from RMK a model of the economic combination of Gener8 and the pre-merger Euronav.

Following a further discussion in Athens in early June 2016, on 20 June Mr Kirk sent an email to Euronav setting out ideas about the refinancing of Gener8’s debt, and suggesting a further meeting. On 28 June 2016, Mr Moore emailed Mr Rodgers as follows:-

“Further to our cony just now, we look forward to working with you on this. We started revamping the financial model based on our conversation last week with Hugo at MM. We were intending to get a new version out to you quite swiftly but perhaps it makes sense to have a financial working group call when everyone is ready in order to build in any additional sensitivities.

Otherwise, from a practical perspective we await your engagement terms with your proposal on the sums involved. We do not have any issue with this being a working engagement with ongoing payment structure as opposed to it being a broker-type fee. We acknowledge that you probably wish to reduce the built in fees on what is another transformational — $1.7billion deal for Euronav. We had them in at $17.9m, of which only —$14.5mill was attributed to RMK. If you want to reduce those by a further few hundred thousand, yes Mike will be extremely upset, but I will do my best to manage him.”

Mr Rodgers replied on 1 July 2016, saying:-

“Rich following your rather drole email of the other evening, I am now attaching a draft consultancy agreement for the appointment. Let me have your comments and then we can get working.”

The draft provided for total potential fees of US$ 500,000 structured as follows:-

“4.1

… the Company shall pay to the Consultant a fixed fee as follows:

(i)

USD 50,000 upon delivery of the model in its current iteration;

(ii)

USD 50,000 upon completion of the model and formulation of the first draft bid document;

(iii)

USD 50,000 upon submission of the bid;

(iv)

USD 100,000 upon acceptance of the bid by the shareholders of Gener8 Maritime Inc.

4.2

The Company may, at its own discretion and in the event of a successful completion of the contemplated transaction, pay a success bonus to the Consultant in the amount of USD 250,000.”

Mr Moore replied by email on 3 July 2016 indicating that the proposal was not attractive to RMK:-

“The proposal as you have presented is not of interest to us. Effectively you have requested 3rd party excel support. This is not what we do. The value of our work as you know and as you have seen is greater than that. There are plenty of out-of-work bankers you could hire to work up a financial model — although given its required level of complication and detail they will not do it for the price you've proposed even if they can get up to speed.

I would actually ask you to have a re-think of what is happening here. The proposed purchase is not a s&p deal buying a bunch of vessels. You know that and, as you said to me last month, there is a lot to do here and a lot of personalities to deal with, sensitivities and plates to spin with the funds as well as with the likes of Peter G and the Navig8 guys who are definitely not going to just roll over — bear in mind we know Nick Busch and his team well. So we're lost as to why you propose to engage us on such a basic basis.

The volume of work here is huge, we can help there, but aside from that remember that whilst some of these funds are in your company RMK deal with them almost every day. We know they are not always going to want to talk to you or Hugo, so whether you like it or not, they will call us and will want to sound out with us and work on points with us they probably find difficult to articulate directly to you. That's the point of an intermediary who knows the market and why people hire advisors on deals 10x smaller than this, let alone this as a $2.6 bill deal.

It's not my place to say it but Management and the Board do have a fiduciary responsibility to shareholders, particularly given the size and scope of this Transaction. I assume that draining management time over what could easily be a 6 month process is not an efficient use of internal resources, considering your day-to-day is running the largest tanker company in the world.

Using RMK as a proper advisor under whatever engagement we end up on, the cost is back-ended on success only and is negligible compared to the overall size and the results. So fundamentally with the build-up work we have done and the information we have been exchanging with the funds to help bring them up to speed, the comfort they have with us and the back-ended nature of the cost, we would assume that you, the Board and shareholders would welcome the hiring of RMK and make use of our full scope of abilities.”

Mr Rodgers responded on 4 July 2016 saying:-

“This draft agreement was not sent to you out of the blue but only after what I thought was a reasonably long conversation with Richard. Let me restate some of those points.

Your comment about fiduciary duty is a[p]posite. Unlike the transaction we previously did, Euronav now has no back stop vote in an EGM to approve a transaction. This will not be OK'ed by Peter and Marc. A fair value opinion will have to be given to the board, which they will refer to in recommending the transaction to shareholders. This cannot with any credibility be provided by RMK. It will necessitate a major US bank. This is even without any equity placement by Euronav.

Debt may be a necessary feature as will be negotiation with certain banks so an advisor with debt issuance capacity will probably be needed. Citi, Calyon, DNB or SEB all have capability and very good connections in Korea and China.

Valuations of vessels have already proven an issue as you requested us to obtain desk top valuations from a credible ship broker rather than VV, but who, Clarksons Platou? Mcquilling Jones? Arrow Seaport, Platou, Fearnleys. I am sure you get my point yours is becoming a crowded space.

All of these organisations starting with the bulge bracket firms, through the debt providers down to the brokers, believe that they can offer the skills to close a transaction like this on their own. Nearly all of them have pitched this deal and provided valuation metrics and fleet value comparisons. To some extent they may be right and if we choose one we will pay once. We believe a more selective approach may be to put a team together using several firms, but not paying several times!

We have worked well together in the past and think you can add value. I think our dialogue would be more constructive if you take the time to look at the a[g]reement sent to you and mark it up with changes you would like and then we can see how far apart we are.”

On the same day, Mr Rodgers explained to Mr Kirk in an email that he saw the scope of the services (listed in quoted subparagraphs (i) to (iv) above) as follows:-

“This to my mind involves you in the planning and where relevant in the discussion around the combined business value. Where directed explaining it to shareholders of Gener8. The individuals are known to all of us and may need to be approached by different people on a case by case basis. This is something we would decide on an ad hoc basis.

I think the most effective way forward is of you to set out what you think you can add to this and that we have a conference call with Hugo Brian and Egied on wednesday. If you are happy with this approach let me know when you might be available.”

In his witness statement, Mr Rodger said:-

“Between the back and forth of the advisory agreement negotiations, I could sense that Richard was deeply offended by the draft agreement. However, given our previous conversations, I struggled to understand why. It was obvious at this point that Euronav were not going to expand the express services in the agreement. I thought RMK were pushing their luck, and Hugo and I considered taking the work elsewhere. From our point of view, we already had an internal team at Euronav providing a lot of the background services. The plan was to always build a transaction team of several firms, as and when it became necessary to bring them in throughout the transaction period, to build on our internal one. We simply did not need RMK to carry out any additional services.

I therefore turned to Michael and Richard to ask what value they thought RMK could bring to the transaction, beyond Euronav’s initial proposal. Richard tried to expand their services to include advising on the capital structure analysis, various security options and the offer form (tender or merger / acquisition), to name a few. I knew that the figures in the acquisition model would be key to advising on these matters, particularly the capital structure analysis, so I did not necessarily see these as “new” services beyond those included in the draft agreement. Richard, again, asked to be a “full advisor” on the transaction.”

RMK submits that Mr Rodger therefore must have made clear to Mr Kirk and Mr Moore that they were being required to perform very limited modelling work, and that Mr Rodger did not deny that in cross-examination. However, in my view Mr Rodger’s oral was more nuanced, and cuts somewhat against the view that Euronav envisaged a narrow role for RMK:-

“ A. Well look, it -- the point that you're emphasising is that to underplay the significance of the model and the fact that as a financial advisor presenting -- preparing that model it is axiomatic that you will then present it, explain it and that that will be part of a process of determining value between the business entities.

…

The work is very important, but I think what you – what we're not trying to suggest here is that they simply worked in a back room on a model and nobody ever saw them. It was very clear from the agreement and it is very clear from the way that we work in understanding value that the person who had prepared and done all the modelling work would have to demonstrate that value to the people that were going to rely on it. Those people wouldn't just be Euronav, they would be outsiders who we would list it as a possibility and had stated would be a possibility because that's the critical part of going through a common understanding of value that will allow a business combination to take place.” (Day 4/58-59)

Also on 4 July 2016, Mr de Stoop sent an internal email to Mr Rodger, saying among other things that “[t]he value of the "model" is indeed limited. Mike wanted to send it to us in the past on a number of occasions. I always refuse on the basis that it would have committed us to them further”; and outlining various services he envisaged Euronav might seek from other advisers in relation to deal structuring, legal and accounting work for US and Belgian filings, a fair value opinion, possibly debt refinancing, and negotiation. Mr de Stoop accepted in cross-examination that he did not that this stage have in mind that RMK would be ‘going into bat’ to negotiated net asset values with Gener8’s M&A advisor, though he said he did not have a discussion with Mr Kirk or Mr Moore about this, and also made the point that “it depends on the context, it depends on the conversation, it depends on where it’s going” (Day 5/69).

Mr Kirk responded on 5 July 2016:-

“The 4 points you list make sense however there are other services not explicitly stated below that are natural to the Transaction and that intrinsically form part of any services we provide. Carving them out is difficult to impossible and certainly detracts from the overall value RMK can provide to Eurona[v]. Some of the more important of these not mentioned would be pro-forma capital structure analysis, input and advisory on the offer form (tender or merger/acquisition), due diligence both pre and post announcement, structuring advice and recommendations, advisory on any new securities, identifying and managing any new participants into the capital structure, etc.

The normal advisor compensation for a deal of this size would be 50 bps or more on the total Transaction size. This excludes any potential capital raise or new securities issue for the Transaction. RMK believes that we are the right firm to be Euronav's advisor on this Transaction. We would hope that our track-record with Euronav has earned us this belief, but for the sake of good order I would like to add that I advised on the largest public-to-public M&A deal (at least prior to this one) where Excel purchased Quintana maritime in a $2.5 billion cash and stock deal while at Dahlman Rose. Furthermore, in addition to many other M&A deals outside of shipping, while I was with DVB I was seconded to FR8's offices in London for 2.5 months to work with Nic Busch and Gary Brocklesby as they sold their 50% stake in FR8 to Projector.

In our view, Euronav will be best suited to utilize RMK as a full-advisor on the Transaction. This means you get our top priority and focus from now until the Transaction closes. You also know that you are working with a firm that has no competing interests and has an active and mutually respectful relationship with the key investors involved. We will perform all of the heavy lifting to support management, help with the nuances of public-to-public M&A and be able to deal with curve-balls as they come up during the process (and they will).

We understand your focus on paying below market for fees so to accommodate for this we would ask for a one-off work fee of $250,000 and a success fee of 25bps of the fully-delivered enterprise value of Gener8 based on the Transaction price at closing. On this basis we will not charge any additional amount for any new securities required for the Transaction even in the event that RMK places new securities directly with a new investor(s). We believe this offers a substantial discount to market price for advisory services and gives plenty of fat for Euronav to bring in a lending bank in the later stages as an advisor if required and cover any other incidental costs such as third party legal and accounting costs and broker valuations.

We've marked up the document to this effect, but are happy to have a conference call Wednesday anytime from 7am EST on.”

As indicated in his last paragraph, Mr Kirk attached an amended draft of the Advisory Agreement with changes tracked. The changes were:-

There was then a conference call, about which Mr Rodger said this in his witness statement:-

“37.

To get around this debate regarding additional services, Michael Kirk suggested to include a “catch all” provision in the Advisory Agreement for RMK to be able to carry out “other advisory related work that would be deemed appropriate for the transaction” [PR1/19-24] as and when it may become necessary to Euronav. My view on this at the time was that, if RMK wanted to demonstrate their ability to deliver additional services, we were happy to listen and take them on board, if the[y] were of any use to the transaction. However, I was aware that any such services would still be covered under the agreement, and therefore, come under the same fee. I thought that this was part of RMK’s agenda to pitch additional services to Euronav, with the aim of eventually being awarded further remuneration down the line.

38.

I organised a conference call with myself, Hugo, Brian Gallager (Euronav), Egied Verbeeck (Euronav) and RMK in an attempt to agree the outstanding points of the agreement. I was becoming frustrated by the negotiations between Euronav and RMK and was ready to take the work elsewhere. I made RMK aware that it would be entirely unrealistic for them to expect Euronav to negotiate this simple agreement further. By the end of the call, RMK understood their specific role in the deal and knew it was a ‘take it or leave it’ decision for them.

39.

I felt that RMK started to understand where Euronav were coming from at this point and were being more realistic in terms of what services they could reasonably deliver to the transaction [PR1/25]. However, as Euronav rejected RMK’s pitch to be a “full advisor” on the transaction, Richard requested that RMK still be named as an “advisor” instead of a “consultant” in the agreement, in order to obtain recognition as a main adviser on the transaction. This seemed trivial to me, so I accepted.”

Asked about this in cross-examination, Mr Rodgers agreed that he had felt frustrated because RMK kept on saying they wanted to be a ‘full advisor’ and Euronav kept on saying no. In response to the suggestion that RMK’s “specific role” was to develop the model and an offer, Mr Rodger said “It was to be the financial advisor who created the model. … And then of course explained it to other people and went to meetings at our request as we set out in our agreement.”

After the conference call, Mr Rodgers on 8 July 2016 wrote:-

“Following our good conversation of wednesday, we would like to propose to work together on project Liberate in the following way.

Initially we would like to work exclusively with you and build up the basis of an offer that would create value for Euronav in making an offer to merge with the target (by way of Euronav taking over GNRT and paying mostly with shares).

It is also important to note the following:

- At the moment both companies trade at a discount to NAV but the discount differential create an opportunity for Euronav to make the deal accretive to Euronav shareholders.

- It is important to recognise from day 1 that a merger NAV to NAV would not create enough value to make it worthwhile for EURN !

- Whilst some of the debt of the target may present an attractive feature in terms of margin, it is difficult to recognise any substantial value for EURN. Even if our goal would be to retain the Kexim and the Cexim financing at an initial stage. The main issue with those pieces of debt are the profile as well as lack of flexibility (selling vessel, changing flags or shipmanagement, etc...).

- The value of the older assets is hardly worth more than scrap.

- few synergies can be found in shipping as you know and we doubt that we will find a lot of cost savings by merging the two companies.

We highlight those points simply because if we were to work with you on a transaction, you would become exclusive to us and even if part of the compensation would be linked to a successful merger, at no point should we feel that you are working to make the deal happen no matter what the conditions are. in other words, you will have to wear a EURN hat and not an RMK one. The first hurdle is Euronav board agreement and for Euronav no merger may also be a good outcome.

The conditions set out to merge with the target will be the following — this is important as it reflects core values set in our investor messaging since IPO in January 2015:

- Combined business Leverage not to exceed 50%

- Break even (cash and P&L) not to exceed current B/E of Euronav

- Liquidity levels (cash, cash equivalent and credit lines or revolvers) to be the same than at present for EURN: namely 2 years of bad market liquidity

Fee proposal:

- a signing on fee of $100k

- upon EURN making a formal written offer: $150k

- upon acceptance of the offer by Bluemountain, Avenue, Oaktree & Navig8: $ 250k After that step we are likely to bring in some other banks

- upon acceptance of the offer by the board of GNRT with a break up fee: $1M

- upon completion of the transaction (after acceptance by EURN shareholders): $500k

We hope that this represent[s] a fair proposal knowing that we still need to room to accommodate bigger street names who can provide debt, fair value assessment for the board and EURN shareholders, increased exposure (retail & institutional) for shareholders in Euronav and potentially assist us with IFRS, auditors, FSMA, SEC compliance,...

We would of course be happy to publicly support and highlight RMK as key advisors on this deal from inception to completion.”

RMK suggests that the opening paragraph, referring to Euronav “initially” working exclusively with RMK and building up the basis of an offer meant that the only role being offered to RMK was building up the basis of an offer. That is not, however, the natural meaning of the message. Rather, it indicates that Euronav envisaged acting exclusively with RMK initially, to build up the basis of an offer, and potentially non-exclusively thereafter i.e. potentially alongside other advisers. Mr Rodgers in cross-examination also did not accept the interpretation suggested, saying “Well, again, I just refer you to the contract. We very specifically set out all the different aspects of what they would be expected to do.” It is true that Mr Rodger accepted in cross-examination that, in this email, he was rejecting “the full adviser role”. However, that is an ambiguous concept. On one view, a full M&A advisory role might include several important services, described in § 60 of Mr de Stoop’s first witness statement, that RMK were never going to provide, such as debt financing, fair value opinion and an official analyst role publishing market research pieces to institutional investors. In any event, it is (if anything) the contents of the email itself that matter. The only types of service which the email specifically indicated might require the engagement of other firms were those mentioned in the penultimate paragraph. It does not follow that RMK was being offered only the very limited role to which it now says the Advisory Agreement is confined.

Mr Moore replied the same day:-

“We certainly recognise Euronav wanting to stick to the core message given to investors since IPO and we appreciate the goal of value creation here. All your comments make sense and the way you want to approach this transaction is well understood by us.

In respect to the fees we have just two queries:

- upon acceptance of the offer by Bluemountain, Avenue, Oaktree & Navig8: $ 250k

We are ok with this conceptually, but it may be difficult to document. Let us know what you have in mind in terms of their acceptance?

- upon completion of the transaction (after acceptance by EURN shareholders): $500k

In general we are ok with your proposal but it is the end result under the right terms that is also important. I think it's reasonable to ask to increase that $500k to $1.5m, thereby increasing the potential total from $2m to $3m, which is an amenable compromise from our last and importantly is only on the back-end. We hope this adjustment is acceptable and we can then concentrate on the task in hand.”

On 11 July 2016, Mr Rodgers told Mr Kirk and Mr Moore that Euronav would not increase its 8 July fee proposal. RMK responded the same day suggesting that the final success fee be amended to include a discretionary element if Euronav deemed RMK’s services to merit it. Mr Rodgers expressed the concern internally that a discretionary fee would result in RMK “want[ing] to demonstrate along the way why they are doing a good job so that they can point to what they have done to support their claim for a discretionary bonus greater than 500K” and “setting ourselves up for aggravation and histrionics later on”. In the event, no such discretionary element was agreed, and the fee structure remained in substance as proposed by Euronav on 8 July.

Mr Rodgers sent a slightly revised version of the draft Advisory Agreement to Mr Kirk and Mr Moore on 12 July 2016, asking them to fill in the missing information about RMK then sign and return. On 14 July Mr Kirk returned a marked-up version, explaining that RMK “have not changed any of the commercial terms (other than in your favor!)”. One of the proposed changes was to alter clause 1.1(v) as follows:-

“Other Advisory related work that would be deemed appropriate for the ProjectTransaction.”

RMK signed the Advisory Agreement on 20 July 2016, and Euronav executed it on 25 July 2016. It terms were materially as follows:-

“This Advisory Agreement (the “Agreement”) is entered into:

BETWEEN: (1) EURONAV NV …

hereafter referred to as the “Company”

AND: (2) RMK Maritime (Europe) Ltd …

hereafter referred to as the “Advisor”

…

WHEREAS:

(A)

The Company is studying a possible acquisition of Gener8 Maritime Inc., a company listed on the NYSE (the “Project”);

(B)

The Company wishes to use the services of the Advisor as an independent contractor for the development of an offer document for the Project as further defined hereunder;

(C)

The Parties wish to specify the terms and conditions of the performance of the Services by the Advisor.

IT HAS BEEN AGREED AS FOLLOWS:

1.

Subject

1.1.

The Advisor shall perform and/or provide, or cause to be performed and/or provide the following main services (hereinafter the “Services”):

(i)

Develop an Acquisition Model for the project in cooperation with the Company;

(ii)

Attend all meetings related to the Project by phone or in person, if so requested by the Company;

(iii)

Keep the Company informed and the model updated to the extent relevant with any information to which it becomes privy in relation to Gener8 Maritime Inc., the Company, the Project or possible competition;

(iv)

If so requested by the Company, approach specifically named individuals to explain the Project model and to advise Euronav of the outcome of such meetings;

(v)

Other Advisory related work that would be deemed appropriate for the Project.

The above list is not exhaustive and subject to change as agreed upon in writing by both Parties.

If so requested by the Company, the Advisor will develop the model directly on the Euronav server through a remote connection specifically installed for the purposes of this Agreement. The use of a remote secured connection will also allow for exchange of information required for the development of the model.

The Advisor shall provide the Services in accordance with industry standards. The scope of the Services may be revised from time to time by written mutual consent of the Parties.”

1.2.

The Company agrees that the Advisor’s affiliate, RMK Maritime Capital, LLC (“Capital”), a broker-dealer registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, Inc., will perform certain of the Services if, in the Advisor’s reasonable determination, such Services should be performed by a U.S.-registered broker-dealer under the laws of the United States. The Advisor agrees to notify the Company if the Advisor determines that Capital should perform certain of the Services, and agrees to inform the Company of the Services to be performed. The Company agrees that any Services performed by Capital are for the benefit of the Company, and that the Company will pay Capital directly for the provision of the Services that Capital performs. The Advisor acknowledges that any amounts paid to Capital for the performance of the Services will not increase the total fees to be paid by the Company for the Services under Article 4 of this Agreement.”

2.

Duration and termination

2.1.

This Agreement is entered into for an initial period of three months, commencing on 20 July 2016. Upon the expiration of the initial three-month term, the Agreement shall automatically renew for the term necessary to complete the Project, unless the Parties otherwise agree in writing.

2.2.

This Agreement will terminate upon the completion of the Project, if such completion occurs before expiration of the Agreement. The Agreement will also terminate upon the Company's written notice to the Advisor stating that the Company has determined not to proceed with the Project, if such determination occurs before expiration of the Agreement.

2.3.

Either Party may, by written notice, terminate this Agreement in the event of a material breach by the other Party, provided that the terminating Party is not also in material breach, and provided further that the breaching Party shall have right to cure any such breach, if curable, within five (5) business days of receipt of such notice. The Agreement will terminate upon the breaching Party's receipt of such notice, if any such breach is not curable, and upon the expiration of the five (5)-day cure period if such breach is curable, but has not been cured on or before such expiration. Any notice pursuant to this article 2.3 shall specify the breach(es) upon which such termination is based. Advisor shall be entitled to any upaid [sic] fee under Article 4 for Services performed.

2.4.

Notwithstanding the aforementioned articles 2.2 and 2.3, article 5 will survive the expiry or a termination of this Agreement.

[…]

4.

Fee and expenses

4.1.

Without prejudice to article 2.3, the Company shall pay to the Advisor the following fee:

(i)

USD 100,000 within 5 business days of the execution of this Advisory Agreement;

(ii)

USD 150,000 upon the Company making a formal written offer to Gener8 Maritime Inc.;

(iii)

USD 250,000 upon receipt by the Company of a written undertaking made by each of Bluemountain, Avenue, Oaktree and Navig8 to approve such formal offer at any general shareholders meeting of Gener8 Maritime Inc.;

(iv)

USD 1,000,000 upon acceptance of the formal offer with break up fee by the board of directors of Gener8 Maritime Inc. and the agreement to recommend the offer to the shareholders of Gener8 Maritime Inc. in a general meeting of such shareholders;

(v)

USD 500,000 upon completion of the Transaction, including approval by the shareholders' meeting of Euronav; and

(vi)

if the fee under (iii) would not have been paid for lack of a written undertaking by each of Bluemountain, Avenue, Oaktree and Navig8 to approve the formal offer at any general shareholders meeting, but the Transaction would nevertheless be completed, the USD 250,000 fee shall be paid together with the fee payable under (v) above.

4.2.

Reasonable out of pocket expenses incurred by the Advisor as a result of the performance of the Services, such as international travel and lodging, shall be reimbursed by the Company subject to the prior approval of the Company and the Advisor's submission of appropriate supporting documentation.

…

12 Prior agreements — Modifications

12.1

This Agreement contains the entire agreement between the Patties with respect to its subject matter.

12.2

It replaces and annuls all prior agreements, oral or written, exchanged or concluded between the Parties relating to the same subject matter.

12.3

No amendment of this Agreement shall be effective unless it is made in writing and signed by duly authorised representatives of all Parties.”

While the discussions concerning the proposed terms of the Advisory Agreement took place, RMK continued to communicate with Euronav about financial information for the preparation of a model. On 14 July 2016, Mr Kirk asked Euronav for charter information; the book value of Euronav’s vessels; Euronav’s drydocking costs; its operating expenditure for its Very Large Crude Carriers (VLCCs), Suezmax vessels, and Floating Storage and Offlading units (FSOs); the estimated spot rates for the VLCC and Suezmax vessels for the third quarter of 2016; Euronav’s forecasted general and administrative costs; and the detail of Euronav’s debt position. Mr de Stoop sent RMK most of that information on 15 July 2016.

On 19 July 2016, Mr Kirk sent Mr de Stoop and his colleague in Euronav’s financial department, Mr Timothy Melis, his model of Gener8’s financial position (“the GNRT Model”). He indicated that there would be two further models: a model of Euronav’s position (“the EURN Model”) and a model of the financial position of the post-merger entity (“the Combined Model”).

Mr Kirk sent the EURN Model to Euronav on 20 July 2016, noting that he needed some assistance in respect of certain issues, including the accounting of a joint venture between Euronav and International Seaways. Following further information from Euronav, RMK made changes to the GNRT and EURN Models and sent final versions to Euronav on 22 July 2016. Mr Kirk proposed that he and Euronav discuss the Models, and that Euronav inform him if anything needed to be adjusted or added.

On 25 July 2016, which was the day on which Euronav executed the Advisory Agreement, Mr Kirk sent Euronav a copy of “the full Project Liberate Model”, i.e. the Combined Model, indicating that it was “in Final Draft Form” and welcoming any comments and suggestions. Mr Kirk noted among other things that:-

The following day, 26 July 2016, Mr Kirk said he had dug deeper into the accretion analysis on the proposed merger, and concluded that even in a scenario where the charter rates were low, the “Transaction is EPS accretive (in fact, it is the difference between positive and negative EPS in 2017)”.

On the same day, Mr Kirk said “I’ll take a first crack at a Board book” and that he had “some specific feedback that I wanted to share on the structure of an acquisition, so maybe I could give you that before the end of the week”. The Board Book was a separate document from the acquisition model, designed to explain Project Liberate to Euronav’s Board of Directors and enable them to decide whether the proposed transaction was worth recommending to Euronav’s shareholders.

Mr de Stoop commented on the models on 29 July 2016, finding them to be robust and detailed. He noted, however, that he would like to start from a different angle and run another scenario. He suggested some adjustments, including adding to the Combination Model NAV calculations using ship valuations provided by the subscription website, vesselsvalue.com (minus 10% for some of Gener8’s vessels). Mr Kirk sent an updated Combination Model on 11 August 2016 taking into account those suggestions, and also reflecting a fall in the vesselsvalue.com valuations and a change in estimated charter spot rates.

On 16 August 2016, after a discussion with Mr de Stoop, Mr Kirk sent an outline of the proposed Board Book to Euronav. The next day, Ms Motyka sent Mr Kirk a first draft of the Board Book, comprising about 45 Powerpoint slides, subject to a few slides whose contents were to follow. A day later, 18 August 2016, Mr Kirk sent Euronav a ‘first cut’ of the Board Book, inviting Euronav’s feedback as to what could be added to improve the presentation. The draft Board Book envisaged ‘deal fees’ totalling about US$ 21.8 million. Much of the content of the Board Book was drawn from the model, sometimes presented in a different form, though it also included some additional material such as the market profile of the proposed combined company by reference to capitalisation, number of vessels and vessel values, as compared with publicly listed companies; a list of Gener8’s top 15 shareholders and their projected post-merger holdings; and an illustration of Euronav’s and Gener8’s share prices. The additional material was largely referenced to public sources, such as Bloomberg, shareholder filings, vesselvalues.com or Clarksons, or provided by Euronav.

On 30 August 2016, Mr de Stoop wrote to Mr Kirk saying “I went through the board book which is a very good start and have a few comments/suggestions/questions” and suggesting a discussion. Apparently following discussion, on 6 September 2016 Mr de Stoop wrote:-

“I am not too sure where we left things after the last phone call but I was under the impression that you were going to work on an update board deck.

In the meantime we have had our own thoughts and would like to simplify the presentation as much as possible to fill the important information during the limited attention span people will have and once they are hooked develop further in annexe.

Once I receive your presentation in ppt I will re-arrange it but in the meantime could you produce the following simple figures/tables: …”

The requested figures/tables related to various asset and liability metrics and different financial permutations for the combined post-merger entity.

Mr Kirk provided an updated version of the Board Book on 8 September 2016, reflecting the share price on 7 September 2016. A Euronav Board Meeting was due to take place on 13 September 2016, and in the preceding days Mr Kirk, in discussion with Mr de Stoop, made a number of further adjustments to the Board Book, culminating in a final version sent on 12 September 2016.

At the Board Meeting on 13 September 2016, Euronav’s management was given “the blessing of the board to go further” (as Mr de Stoop communicated it to Mr Kirk). Mr de Stoop said there were a few things he wanted to work on before setting a strategy on how to approach the Gener8 shareholders, including:

In response, Mr Kirk noted the robustness of the model but also explained that he would need some time to make and sense check the various adjustments required by Mr de Stoop. He expected to able to get the updated version to Mr de Stoop by the end of the following week. In addition, Mr Kirk set out his thoughts on how Euronav might plug the liquidity gap post-merger – suggesting a perpetual preferred bond that would never mature and convert into common equity (or a “straight preferred” as Mr Kirk referred to it). The market for such a product was said to be “on-fire (so pricing is attractive to issuers)”, and Mr Kirk noted that he would be happy to make any introductions to Euronav if required.

On 18 September 2016, Mr Kirk provided an updated Combination Model to take account of Mr de Stoop’s comments of 14 September 2016. Updated versions of the Board Book were provided on 18 and 30 September 2016.

Mr de Stoop on 20 October 2016 sent a detailed email to RMK indicating that Euronav continued internally to “struggle” largely over (a) ensuring the company’s post-merger liquidity leverage and average break-even, (b) mitigating the risks associated with the execution of any proposed transaction, and (c) post-transaction integration. Mr de Stoop said Euronav had been thinking around the structure, currently envisaged as involving an offer to pay in shares and take over the liabilities, raising further equity in the market and selling non-core assets. Mr de Stoop described a different potential way of structuring the transaction, involving acquiring assets and existing bank financing, setting out the advantages he thought that approach would have. He suggested a call to discuss. Mr Kirk provided his views by way of written commentary inserted into a copy of Mr de Stoop’s email, and a subsequent call.

Over the next couple of days, it was decided that Euronav would pursue an approach whereby (a) it paid for some of Gener8’s shares in cash and the remainder in common equity shares, and (b) it would raise the necessary capital to pay the cash element of the acquisition, as well as to plug the post-merger liquidity gap, by carrying out a private placement of convertible preferred bonds. On 22 October 2016, Mr Kirk sent a two-page email starting “I think that Friday's call was extremely productive and I really like the updated concept of pre-raising the capital via a private placement”, and proceeding to set out further commentary about the new proposed transaction structure. Mr Kirk ended by saying he would “finish up the updated model, based on this structure above over the weekend”.

On 25 October 2016, Mr Kirk circulated an updated Combination Model and Board Book reflecting “the capital structure that I outlined yesterday”, i.e. his most recent thoughts on how the acquisition and capital raise could be structured.

RMK updated the Models from time to time due to movements in Euronav’s and Gener8’s share prices and financial positions, for example after the announcement of Euronav’s Q3 2016 results at the end of October 2016. By December 2016, the Board Book had been through 20 or more iterations.

During a meeting between Euronav and RMK in London on 3 November 2016, Euronav requested a Pitch Book, also known as a “9-Pager” or “15-Pager” depending on its length. This would be a summary document explaining the benefits of the proposed acquisition of Gener8 to Euronav’s Board, including two scenarios: the “offer case”, i.e. the deal ratio and price that would be offered to Gener8, and the “worst case” or “limit case”, i.e. the highest deal ratio and price that Euronav might contemplate paying.

Mr Kirk provided on the evening of 5 November 2016 a three-page “Transaction Overview” which, in summary, set out that:-

On 8 November 2016, Mr Kirk emailed Mr de Stoop setting out comments on the ‘worst case’ and ‘best case’ scenarios for the proposed acquisition, on which he invited Mr de Stoop’s comments before sending the analysis to everyone. Mr de Stoop replied affirmatively, adding “Don’t forget the idea is to launch (test the waters) with the best case and know our absolute limit at which we would walk away".

Following a conversation with Mr de Stoop, Mr Kirk made some adjustments to the assumptions, and on 15 November 2016 sent Euronav a 9-page document setting out the ‘worst case’ scenario for the transaction. This was an adjusted and expanded version of the 3-page Transaction Overview, also including analyses of NAV, loan to value, shareholder value accretion, fleet operating days and liquidity. That was shortly followed by the ‘offer case’ version. Those documents together constituted the Pitch Book.

The Pitch Book, as revised from time to time, include textual analysis of proposed structures, their effects on the transaction and financial data regarding NAV, financing and the impact on existing debt. This narrative was new as compared to the model. At the same time, the contents of the Pitch Book were and remained closely linked to the model as it stood from time to time. For example, in a WhatsApp dated 11 December 2016, Ms Motyka confirmed that 90% of the 9-Pager was done and there were limited figures that she could not link to the model. A WhatsApp from Mr Kirk’s at 18:46hrs on 4 January 2017 asked Ms Motyka if she could do the ‘offer case’ and ‘limit case’ 9-pagers that evening, if he saved the model, saying “I will paste in all the appropriate graphs so you just need to do the words”. Ms Motyka replied, “I think I’ll be able to finish it quickly enough”. The 9-Pager was sent over to Euronav the following morning together with the latest model. To similar effect, [E19/292] confirms that the 15 pager (a longer version of the 9 pager) uses cut and pastes from the model.

Returning to mid November 2016, Mr de Stoop provided comments on the Transaction Overview documents, and some additional financial information to factor into the assumptions underpinning the analysis, on 16 November 2016.

On 18 November 2016, Mr Kirk “took a first cut at an action plan for the next 6 weeks” which envisaged a formal offer being made by Euronav to the Geenr8’s board in the week of 5 December 2016, the transaction being approved by Gener8’s board in the week of 12 December 2016, and the announcement of the tender offer being announced in the week of 18 December 2016. By Mr Kirk’s own admission, the timeline was ambitious, at least insofar as it related to the acceptance of the formal offer by Gener8’s board within a week from having been made by Euronav.

On 22 and 23 November 2016, Mr Kirk provided updated 9-Pagers (Pitch Book) taking into account Mr de Stoop’s comments on (a) the worst or ‘limit’ case scenario and (b) the ‘offer case’ scenario.

The 9-Pagers (Pitch Book) included figures for (a) deal fees and expenses, and (b) the costs of consolidation, and on 12 December 2016, Mr de Stoop requested the detail of the fees and expenses included in those figures. Mr Kirk provided the detail for the consolidation costs on the same day – explaining that it included Gener8 personnel related costs, including US$8.325 million in compensation upon termination of the senior management personnel, and US$10 million for non-management redundancies and transition costs. The detail of the estimated deal fees was explained by Mr Kirk on 19 December 2016 as including, on the Euronav side, “US$18.0 million to investment banks for advisory and capital raise”.

During this period, it was agreed that Euronav and RMK would have weekly calls. The Combination Model and the 9-Pagers (Pitch Book) were updated by RMK ahead of each meeting to reflect any changes in the financial positions of the parties.

In addition, Euronav’s Head of Investor Relations, Mr Brian Gallagher, began work on a ‘pitch deck’: a presentation that Euronav would use to ‘sell’ to Gener8’s current shareholders on the idea of Euronav’s acquisition of Gener8. Mr Gallagher on 16 December 2016 sent a draft of the pitch deck to the Euronav team as well as Mr Kirk for discussion. Mr Kirk replied that RMK had already “started a draft on our side, so we will plan on combining and circulating something in the coming days”.

In an email to Euronav shareholders around this time, dated 20 December 2016, Mr Rodgers said “Attached are the Data Table and transaction overview prepared on a weekly basis by RMK, our adviser for the evaluation phase of the transaction”. Asked about this in cross-examination, Mr Rodgers said that the email was written during the evaluation phase of the transaction, so his description of RMK was not significant. On one view, Mr Rodgers was in fact going further and was referring to RMK’s role in general. However, RMK’s role was in no sense the focus or subject-matter of the email: the reference to RMK was merely a short way of identifying the source of the information, in a message written some months after the Advisory Agreement was signed. I do not regard it as having any real significance.

Euronav had meetings with some of Gener8’s key shareholders, as well as representatives of funds who might be interested in financing the transaction through convertible preferred bonds – in particular, GSO Capital and Golden Tree. Mr de Stoop suggested that both funds contact Mr Kirk to discuss the financial model that he had built, and noted that Euronav would like to be in a position to make an offer for Gener8 during the second or third week of January 2017. The funds contacted Mr Kirk, who provided the combination model to them, and additional detail and explanation where required. RMK’s evidence (which I have no reason to doubt) is that it had pre-existing relationships with these funds.

In the meantime, Mr Gallagher began work on a draft of the offer letter to Gener8’s board.

On or around 21 December 2016, Euronav instructed its US lawyers, Seward & Kissel LLP (“SewKis”) to commence ‘due diligence’ review of publicly available information relating to Gener8, including Gener8’s ‘Form 10K’ filing with the US Securities and Exchange Commission, material agreements, loan agreements, employment agreements, for key change of control/merger provisions. Some of that work had already been done by Mr Kirk in order to obtain the financial information for his Models, and SewKis requested and obtained some of RMK’s work product.

On 6 January 2017, GSO Capital provided a term sheet setting out the terms on which it would be willing to finance the proposed merger with Gener8 through convertible preferred bonds and common equity. The offer was unattractive to Euronav, and after discussions internally within Euronav and with Mr Kirk’s input, Euronav provided GSO with comments setting out its position on 20 January 2017. As part of this process, Mr Kirk on 7 January 2017 provided Euronav with a comparison of various deal structures in the light of the preliminary feedback from GSO, and some commentary. Mr de Stoop in response sent Mr Kirk GSO’s term sheet, and requested a call later that day.

In the meantime, further updates and adjustments were made to Mr Kirk’s Models and 9-Pagers (Pitch Book). Euronav carried out an analysis of Gener8’s fleet and made adjustments to the vesselsvalue.com valuations for each of the vessels to take into account the quality of the ship and illiquidity in the market which would make the sale of certain Gener8’s ships difficult. This process began with an email from Mr de Stoop to Mr Kirk of 19 January 2017 asking RMK to produce a complete fleet list with year built, yard and current vessel value, and saying “We will analyse it and adapt it accordingly”. Mr Kirk provided a list of Gener8 fleet values the following day, derived from the subscriber service vv.com, following which Mr de Stoop proposed adjustments to the vessel values and invited comments from Euronav management. A copy was sent to Mr Kirk, who requested details of Euronav vessels so that he could make a comparison for relative NAV purposes. On 26 January 2017, Mr de Stoop sent a list of fleet values to Mr Kirk saying:

“see attached.

we really went through the fleet into details and can probably justify every discount or reduction of value applied.

It is as we mentioned either because the ships necessitate repairs for their structural problems well known in the market or because they are not ships that we want to keep (wrong size or wrong segment) or too old for us to trade.

can you plug that in and see what it does to the NAV

As far as EURN is concerned i have adjusted our N-class and nothing else because our older vessels are on TC [time charter].”

Mr Kirk used the revised vessel values to update the model.

GSO Capital’s response to Euronav’s comments on 25 January 2017 effectively repeated the terms of its original offer, albeit showing some limited flexibility.

Around the same time, Euronav began to arrange to meet with some of Gener8’s shareholders to ‘sell’ the idea of a merger – in particular, Blue Mountain and Blackrock, both of whom agreed to sign Non-Disclosure Agreements.

At the end of January and the beginning of February 2017, Euronav (in particular, Mr de Stoop and Mr Gallagher) began to work in earnest on pitch decks for the purposes of presentation to Gener8 shareholders as well as to potential investors in Euronav, with the input of SewKis and Mr Kirk. On 30 January 2017, Mr Gallaher sent a draft of the pitch deck to Mr Kirk with a request for a call “to get this document into shape for use later this week”. Mr de Stoop emailed Mr Kirk on 1 February 2017 saying, “As mentioned a minute ago on the phone, could you take the presentation and populate it with what you can and send it back to us overnight...Good luck and good work!”. As part of that email, Mr de Stoop provided details comments on adjustments to NAV, specifically in relation to fleet valuation matters. Mr Kirk provided RMK’s comments on the slides on 2 February, at the same time saying “RMK is happy to take ‘ownership’ of the presentation, which clearly means that we will be responsible for keeping the presentation up-to-date, error-free, consistent and ready to go at all times – given that much of the presentation will ideally be linked to the final model, this is probably the most efficient way forward”. RMK provided Euronav with a near final version of the presentation for Gener8’ shareholders on 3 February 2017. The final pitch decks were provided to Blue Mountain in advance of a discussion between Euronav and Blue Mountain on 6 February 2017.

Mr Kirk gave evidence that he had a telephone conversation with Mr de Stoop in February 2017 about fees. This is the first of a series of contacts on which RMK rely as showing a joint understanding that RMK was providing services that Euronav would have to pay for (over and above the fees provided for in the Advisory Agreement). I consider these contacts individually and, later, in their totality.

In his witness statement, Mr Kirk said:-

“… I recall clearly having the conversation with Mr de Stoop in February 2017. It was a phone call from my old office in Manhattan. While it is fair to say that no actual figure was discussed, we did discuss the fact that RMK had initially been employed by Euronav on a limited advisory basis and the work that was now being done, and that would be required to be done going forward, was in excess of and far and beyond the scope of the Advisory Agreement. I have no doubt in my own mind that he said something along the lines that we were not to worry and that Euronav would take care of RMK and they would make sure RMK was paid properly. Mr de Stoop acknowledged during that conversation the work that RMK had done was in excess of the work under the Advisory Agreement.” (§ 32)

“Indeed, having conducted the significant amount of work that we had during this period, it was in February 2017 when we had our first conversation with Mr de Stoop to advise that we needed more by way of fees for the work that was being done on behalf of Euronav. My very clear recollection is that his response was positive and that Euronav would pay an appropriate fee. As I have stated above, at the request of Euronav we were carrying out work beyond the scope of the Advisory Agreement, i.e. far and beyond the ‘study’ of a potential deal, to an actual transaction. Therefore, we did not want to be in a position where we were working for a fee below that to be expected for the level of work we were doing. I would consider this to be the same in any business. As a result, I raised this with Mr de Stoop in February 2017 and, as a result of that conversation, I had no reason to believe that Euronav would not pay a fee commensurate to the work being done given our working relationship and previous deals.” (§ 61)

There is no contemporaneous record of the conversation on either side, except that it is alluded to a text message Mr Kirk sent to Mr de Stoop on 18 June 2018 saying:-

“Hugo, I'm glad we spoke today and I hope you understand where we are coming from. Going back to the last bullet of your presentation, we're asking for Euronav's respect. We put the same blood, sweat and tears into this Transaction that you did and we feel like we were a steady pair of hands the entire way through. We want to continue to add value to Euronav which we consider to have (and this is regardless of this outcome) the best Management team in shipping. That said, we feel like we have and continue to do a great job for Euronav and effectively ask for you to respect RMK. We didn't shy away from having this fee discussion and brought up at least 5 times starting in Feb 2017.

We continually agreed to defer the fee conversation because we believed that Euronav would properly value our contribution. We didn’t do this naively, we believed this because the last time we helped you complete a Transformative deal, the compensation was fair and reasonable. …”

Mr de Stoop replied, “I just sent you a long email explaining our position and more importantly the referencing fees taken with 2 banks for similar transactions.” His email, sent during the evening of 18 June 2018, set out why he and Mr Rodgers felt the parties were a long way apart as to fee levels, ending with the sentence “On that basis, I am afraid our positions are irreconcilable (unless you tell me otherwise) and if that is the case, I wonder what's in it for Euronav to move away from the contract....”.

In cross-examination, Mr Kirk gave this evidence:-

“Q. …Mr Kirk, what I would suggest to you is that you do use different terms -- "commensurately", "properly", "appropriate" and you being taken care of. What is your recollection of the words actually used at that time in that conversation?

A. My Lord, I don't remember the exact quotes from Hugo. What I can say for certain is that he acknowledged that we were working beyond the scope and told me that we would be paid appropriately.

Q. Mr Kirk, I suggest that your recollection in your witness statement is inaccurate and you have no recollection of that being said at all.

A. I disagree with that. I have a strong recollection of what was said by Hugo De Stoop. I don't remember the exact words used though.

Mr de Stoop in his witness statements gave evidence in general terms about post-Advisory Agreement fee discussions, which he originally seemed to recollect began later in 2017. He said in his first statement:-

“ As I recall, RMK became aware of UBS’ fee for the transaction from Gener8 on review of the expenses listed in the NAV calculations from around August 2017. I remember that this was the point that RMK started raising the issue of additional compensation for RMK’s work on the transaction. It seemed to be that once they became aware of UBS’ fee, RMK became further disappointed with the agreement that they negotiated with Euronav and sought the same remuneration as UBS.” (§ 64)

In cross-examination, the alleged discussion in February 2017 was not specifically put to Mr de Stoop as an individual discussion. Nor was it ever put to him that he acknowledged that RMK was working beyond the scope of the Advisory Agreement. The main exchanges in this part of Mr de Stoop’s cross-examination were as follows:-

“16 Q. Do you agree that any work that RMK did for you in that period was outside the scope of the advisory agreement, not part of what you had engaged them to do?

A. No, because at the end of the day, when -- when you look at the model and when you look at acquiring a certain set of assets or acquiring a company, this is just another scenario. So you're not going to rebuild an entirely -- an entirely new model for that scenario. I mean, at the end of the day, if you look at the transaction, that's a little bit what we did, so we acquired the entire fee [sc. fleet] but we sell out -- sell out was still the same model that we were using but it was running another scenario.” (Day 5/84-85)

and:-

“I want to move on then to the discussions that took place from February 27 onwards in relation to RMK's fee. It's right, isn't it, that from February 2017 onwards, RMK, Mr Kirk and Mr Moore, regularly pointed out that the transaction was taking much longer than anticipated. Isn't that correct?

A. Yes.

Q. And they regularly said that they were doing work which went far beyond the scope of the advisory agreement. Is that right?

A. They said that.

Q. And they said that accordingly, they thought that they were entitled to an additional fee commensurate to the work that they were doing. Is that correct?

A. Yes, well, the definition of commensurate is obviously not very precise, but yes, they said that.

Q. Yes. They thought that they were entitled to a fair fee or a reasonable fee for the extra work that they were doing, as they saw it?

A. They said that, yes.

Q. Yes. And they said it a lot of times, didn't they?

A. Well, I think that over the course of six months, maybe three or four times, yes, so a lot of times. And believe me when my wife is telling me something a lot of times it's more than that!

Q. And Mr Rodgers said yesterday, Mr Rodgers told us yesterday, that he told Mr Moore and Mr Kirk that Euronav would take care of RMK. And you said similar things to Mr Moore and Mr Kirk, didn't you?

A. It's not an expression that I use so I doubt I ever said that. But I may have used a different expression.

…

MR RUSSELL: It was Mr Kirk who spoke to you about the fee in the way in which I've described; yes?

A. Yes.

Q. And you say that you might not have used the expression that Euronav would take care of RMK because that doesn't sound like your words. But you said words to similar effect to Mr Kirk. Is that correct?

A. I think that every time we had a conversation around fees, I think that we were probably each of us thinking about something that was completely different. So, you know, on our side we, myself and Paddy, we were discussing that we were thinking about a discretionary bonus and a reasonable amount of money. And on their side until they came up with the eight digit figure they were probably thinking about a large sum -- a large amount of money. And it's true that the conversation was sort of intensified when they saw what UBS was getting.

Q. So you think that you probably had different ideas in mind as to the amount of additional fee that --

A. The amount, yes.

Q. Yes. But when Mr Kirk told you that he thought that the transaction was taking much longer than anticipated and that they were doing work far beyond the scope of the advisory agreement, and that he thought that they were entitled to an additional fee, you did not say to him, did you, "You are not entitled to an additional fee, you are only entitled to the two million in the contract"?

A. That's probably correct. What I have said is that we will discuss that at the end of the transaction.

Q. Yes, you would discuss the number at the end of the transaction was what you meant?

A. We will have a discussion and whether there's a number or not we will have a discussion and -- depending on the outcome of the discussion, it might be a number or not.

Q. Yes. But you did not say to Mr Kirk that he would only receive the two million, did you?

A. I didn't say or I didn't -- or I -- you know, either way that was not part of the conversation. So I didn't say you are only going to receive two million or you're not only going to receive two million.

Q. And you did not say that any additional payment would be purely in Euronav's discretion, did you?

A. Oh I think that was mentioned on several occasions.

Q. I suggest to you that what you said was what you have just said that you said, which was that the discussion about additional fee would take place at the end?

A. Yes.

Q. That's what you said?

A. At the end or later. I mean certainly not at the point where they wanted to in the conversation.

Q. Yes. And Mr Kirk was saying to you that they needed an additional fee, they felt they were entitled to an additional fee. Yes?

A. I don't think what he said they needed, because if he would have said I need an additional fee, that means that otherwise he's going to stop working, which was never part of the conversation. And I believe it was never part of the conversation because under the contract they were not allowed to stop working.

…

Q. No, I'm asking you what he conveyed to you. He conveyed to you that you understood from what he was saying that he wanted reassurance that there would be an additional fee?

A. I think he wanted reassurance that we would discuss it and it wouldn't be strictly speaking only the fee of the contract.

Q. Yes. He wanted reassurance that he would get more than the fee of the contract?

A. Cannot get less, right?

Q. He wanted reassurance that he would get more than the fee of the contract, that's right, isn't it?

A. Reassurance is a feeling so I cannot speak on his behalf.

Q. And I suggest to you that -- you may say that you can't comment on this -- but I suggest to you that he would have had no reassurance if you had said any additional payment will be entirely in our discretion. That must be right, mustn't it?

A. No, I completely disagree with you because in these transactions there is a lot of time a discretionary fee, I mean from time to time it's even in the contract itself so it's foreseen and I think that a lot of people take a great deal of comfort that a discretionary fee is going to take place --

…

So I sincerely disagree with you.” (Day 5/151-157)

The questions then moved on to the emails of July 2017 about fees.

In these circumstances, I do not consider that it would fair to conclude that Mr de Stoop acknowledged to Mr Kirk or agreed that RMK was working beyond the scope of the contract. That suggestion was never put to him in terms, either in relation to the February 2017 conversation or at all. In any event, on the evidence given I would not, and do not, find that he did say that. I am satisfied that both Mr Kirk and Mr de Stoop’s evidence about this alleged conversation was honestly given. I consider it more likely than not, bearing in mind Mr Kirk’s recollection and the later text message quoted above, that a conversation about fees did take place in February 2017. I also consider it plausible that Mr Kirk said during that conversation – as Mr de Stoop accepted he had said several times – that Mr Kirk considered RMK’s work to be going beyond the scope of the Advisory Agreement.

However, I do not believe that Mr de Stoop himself indicated that he agreed with that view, nor that he said anything suggesting that RMK was entitled to, or would necessarily, receive further payment. It is evident from his evidence as a whole that he did not consider RMK to be working beyond the scope of the Advisory Agreement or to have an entitlement to further payment (see, for example, the passage of his oral evidence quoted in § 230 below), and it would have been surprising if he had said either of those things to RMK. Further, Mr de Stoop is unlikely to have regarded himself as having authority to agree that RMK was working beyond the scope of the Advisory Agreement and would be entitled to additional payment: he was the CFO, not the CEO, and made clear in his oral evidence that he regarded Mr Rodgers as his ‘boss’ and as having the ‘last word’ on such things. The gist of Mr de Stoop’s evidence quoted above was, rather, that it was mentioned on several occasions that any additional payment would be discretionary, and that he spoke to RMK in terms of there being a ‘discussion’ about whether there would be a further payment and, if so, in what amount. I accept that evidence.

In addition, and even accepting Mr Kirk’s evidence that there was a high degree of trust between the parties at the time, I consider it unlikely that no record would have been made on either side if Mr de Stoop had accepted that RMK was doing work beyond the scope of the Advisory Agreement, or that RMK would in due course be entitled to additional payment over and above the fees stated in that agreement. Even if Mr Kirk had felt inhibited about sending a confirmation to Euronav direct, he or Mr Moore (with whom Mr Kirk said he was sure he would have reported the conversation) would have been very likely to record or mention it in a contemporaneous email, text or other message. As it is, Mr Moore did not refer to this conversation in his witness statements at all.

In all the circumstances, I do not consider this conversation to be a reliable basis on which to conclude that the parties had a joint understanding of the kind RMK allege.

The exercise of assessing Gener8’s fleet in order to adjust the vesselsvalue.com valuations had led Mr Rodgers to begin to consider whether a full merger of Gener8 was actually the best outcome for Euronav. On 2 February 2017, he raised with Mr de Stoop the prospect of Euronav simply purchasing Gener8’s fleet of modern Korean-built vessels, which he thought could be beneficial for both Euronav and Gener8. Mr de Stoop thought it was a good idea (subject to modelling what Euronav would look like with those vessels added) but indicated that if he were the CFO of Gener8, he would likely never advise the shareholders to take the deal.

Mr de Stoop informed Mr Kirk of the proposed new approach, and on 23 February 2017 Mr Kirk shared with Euronav an analysis he had carried out comparing Euronav’s financial position (a) as it stood at the time, (b) if it carried out a full acquisition of Gener8, and (c) if it acquired Gener8’s 13 2015, 2016 and 2017 Korean-built vessels. The result of this comparison was that “Assuming this is a viable option, [the acquisition of the 13 Korean-built vessels] seems to make the most sense for EURN”.

By a letter dated 20 March 2017, Euronav made an offer to Gener8 to purchase the vessels for US$1,009,000,000, to be paid by (a) Euronav assuming Gener8’s debt to a syndicate organised by Nordea, the Export–Import Bank of Korea (“KEXIM”) and Korean Trade Insurance Company (“K-Sure”), estimated to be US$696 million and secured against the 13 vessels, and (b) Euronav paying the balance of the US$1.009bn in cash. The offer was stated to expire at 5pm on 24 March 2017. KEXIM and K-Sure are Korean export credit agencies who had financed Gener8’s Korean-built vessels.

In view of the vessels-only offer, on 23 March 2017 RMK invoiced Euronav for US$ 150,000 pursuant to Clause 4.1(ii) of the Advisory Agreement, on the basis that it had met the milestone of Euronav submitting a formal offer to Gener8’s board. Mr de Stoop approved the payment on 31 March 2017, having specifically considered the terms of the Advisory Agreement.

On 27 March 2017, Mr Rodgers updated the Euronav Board about the vessels-only offer. He explained that he had spoken with Gener8’s Chairman, Mr Georgiopoulos and other members of the Gener8 board, from whom he understood that they: (a) had appointed an advisor to evaluate different alternatives, (b) were not currently inclined to accept the vessel-only offer, which they considered a raid on Gener8’s ‘crown jewels’ at the bottom of the market, (c) would, however, like an extension of the expiry date until 3 or 4 April 2017 when the Board would meet to review the offer formally (which Mr Rodgers had essentially agreed to), and (d) would prefer a merger, or a similar offer to the vessels-only offer but on a smaller scale.

On 17 March 2017 Mr Kirk set out his views on a share for share merger, in the light of the apparent wish of the Gener8 shareholders for a full merger. On 15 May 2017 Mr Kirk gave his views on the relative merits of a stock-for-stock merger vs cash tender on 15 May 2017. The latter email was forwarded to Euronav, who asked SewKis to discuss the issues it raised with Euronav’s Belgian lawyers.

Over the ensuing months, RMK liaised with private equity investors. RMK also further updated the Board Book, Acquisition Model, and 9-Pagers(Pitch Book), focussing on understanding the valuations of Euronav and Gener8, including by reference to Gener8’s debt and vessel earnings, to help Euronav assess the financial health of Gener8 and to assist with eventual negotiations.

In view of the feedback from the Gener8 board, for a short period beginning on 5 April 2017 Euronav’s attention shifted towards an attempt to purchase Gener8’s assets as part of a potential joint bid with another large tanker operator, Frontline. The idea was that Euronav would purchase six of the Korean-built vessels from Gener8 for US$ 447,500,000, and Frontline would merge with the post-transaction Gener8. However, this concept was not pursued to the stage of making an offer to Gener8’s board, and by 14 April 2017 it was apparent that the Gener8’s existing shareholders, including Blackrock and Blue Mountain, would only be interested in a share-for-share merger.

Gener8 had not formally responded to Euronav’s vessels-only offer, and on 18 April 2017 Mr Kirk wrote to Mr Rodgers and Mr de Stoop suggesting that “it would make sense for you to give your authorization for me to have a meeting with Peter G[eorgiopoulos] to discuss the EURN approach for vessels. It may be easier for him to speak openly to an intermediary and it seems that at a minimum we should be able to get some idea of his preference”. In response, Mr Rodgers asked Mr Kirk to “Do nothing at the moment” and indicated that he would speak to Mr Georgopoulos in due course.

Gener8 wrote to Euronav on 25 April 2017 with its own merger offer. The Gener8 offer was for a share-for-share deal on the basis of a merger of equals, whereby the Euronav shareholders would hold 53.7% of the combined company and Gener8 shareholders would hold 46.3%. The offer was premised on Gener8 having obtained a new and unnamed investor who was said to be willing to invest US$500 million in new equity concurrently with the merger. The letter noted that Gener8’s Board of Directors had formed a committee of disinterested directors, chaired by Mr Steve Smith, to engage with Euronav and Gener8’s stakeholders, and that the committee was being advised by UBS.

It appears that Euronav did not immediately inform Mr Kirk of the Gener8 offer, and in early May 2017 Mr Kirk was looking for ways to “make sure that RMK is being helpful where needed and is being proactive on any analysis”. He seems to have been updated on the position in a telephone call with Mr de Stoop on 9 May 2017.

RMK carried out some analysis of what a merger could look like, and (with the assistance of SewKis) considered how such a deal for Gener8 could be structured – either as a share-for-share deal or a cash tender. In addition, at the request and with the input of Mr de Stoop, Mr Kirk updated the ‘offer case’ 9-Pager (part of the Pitch Book) (a) to reflect the changes in Euronav and Gener8’s respective financial positions since it had been last updated, and (b) to assess what the transaction would look like if it were done by way of either a share-for-share merger or a cash tender.

Euronav continued to consider alternative options, including a form of acquisition of some of Gener8’s vessels rather than the entire company. It became apparent that Frontline was seeking to acquire Gener8 on its own, and Euronav and Frontline reached an understanding whereby Euronav would assist with funding Frontline’s acquisition of Gener8 by buying a block of ships from Frontline post-merger. However, negotiations between Frontline and Gener8 reached an impasse, due in particular to Frontline’s falling share price, and it became apparent by 8 June 2017 that Frontline had retreated from its attempt to purchase Gener8.

On 20 June 2017, Mr Kirk provided Mr de Stoop with brief commentary on other listed potential “suitors”, other than Frontline, who might be interested in acquiring and merging with Gener8 in conjunction with Euronav.

In late June 2017, it transpired that another large tanker operator, International Seaways, was also attempting to acquire Gener8. As with the Frontline proposal, Euronav raised the idea of a joint bid whereby it would take Gener8’s 12 modern Korean-built vessels (one of the original 13 having been sold). On 26 June 2017, pursuant to a request from Mr de Stoop, Mr Kirk provided Euronav with analysis of a joint bid for Gener8 by Euronav and International Seaways. In the event, International Seaways was not interested in the proposal.

Following a call between Euronav, RMK and Blackrock on 30 June 2017, the potential for a share-for-share merger between Euronav and Gener8 was revived. It was agreed that Euronav would engage with Gener8’s independent committee, and “UBS and RMK will compare notes as far as NAV is concerned going line by line (value of each ship)”. In the meantime, Euronav would work with RMK to go through each of Euronav and Gener8’s fleet to assess NAV before RMK discussed it with UBS.

Accordingly, Mr Kirk contacted the chair of the independent committee, Steve Smith, on 30 June 2017, explaining that “[i]t would be helpful for EURN to better understand GNR’'s NAV methodology”, and requesting that UBS “send over their vessel value / NAV spreadsheet” or, given that Mr Kirk was based in New York, sit down with them the following week to discuss. Steve Smith informed Mr Kirk that he should feel free to contact the committee’s advisor at UBS, Mr Simon Smith, who had been forewarned of UBS and RMK needing to consider UBS’s NAV calculations. Mr Kirk made his first contact with UBS on 1 July 2017, seeking to arrange a meeting where he and UBS could go through Gener8’s NAV. On 2 July Mr Kirk forwarded UBS’s NAV analysis to Euronav, proposing a call with Euronav, and said he would do some analysis of it.

On 4 July 2017, Mr Kirk reported the “great news” that UBS were using very realistic vessel values, identifying only four principal areas of difference. On 5 July 2017, following a meeting with UBS, Mr Kirk confirmed “BIG PICTURE, we are A LOT closer on values than we anticipated” and identified a small number of issues and questions. On 6 July 2017, Mr Kirk identified the limited questions he planned to ask UBS and told Mr de Stoop that “I view the meeting [with UBS] as fact-finding and then we can circle up and go back to them with our thoughts on NAV’s for both Companies and the discount level that we believe makes sense. Let me know if there is anything else I should be asking and/or if you have any different views on the goals of the meeting or overall tact.” Mr de Stoop responded saying that they were “very good questions for a first meeting”, and adding a few questions of his own. In response to Mr Kirk’s spreadsheet of charter-adjusted values, Mr de Stoop said “I am not sure I would go into so much detail with UBS as it is more important to agree on the principles behind NAV and premiums and discounts.” After the initial meeting on 6 July 2017 in New York, Mr Kirk confirmed to Euronav the answers to the questions raised and sent a short list of the information that UBS had agreed to provide.

The fees and expenses incurred in effecting the proposed merger, as well as the costs of post-merger consolidation, logically fell to be deducted from the relevant party’s NAV for merger pricing purposes (i.e. to work out in what proportions Euronav’s and Gener8’s shareholders would hold shares in the merged company). It was therefore necessary to know what Euronav’s own deal fees and consolidation costs would be, as well as Gener8’s.

On 5 July 2017 Mr Kirk sent Mr de Stoop a breakdown of deal fees and expenses. His list of deal fees included the following commentary:-

“5.

EURN Bankers / Legal – EURN does not need to hire another investment bank and thus the $12 million less EURN’s legal expense is enough for RMK (essentially a 50 bps Transaction fee, which is very cheap given the work).” 

It appears that the original US$18m assumption referred to in RMK’s November 2016 9-pagers (see §§ 96 above) had been reduced to US$ 12 million, because by this stage it was clear that no capital raising would be required.

Mr de Stoop replied with annotated responses to Mr Kirk’s message on 6 July 2017, including the following on Mr Kirk’s paragraph 5-:

“Our board is very likely to wish a fairness opinion and in any event we will have audit fees related to fairness opinion and consolidation costs. None of these can be done by RMK and we will therefore need to hire another bank.” 

The Claimants submit that this email exchange, viewed objectively, conveyed that Euronav accepted that RMK was working beyond the contractual scope of the Advisory Agreement and was thus entitled to further fees of the order of 50 bps (around US$8.5 million on a US$1.7 billion deal). I disagree. As Mr Rodgers pointed out during the cross-examination to which I refer below, the nature of this email exchange was a discussion about costs to be deducted for NAV calculations. It in no sense purported to be a reopening, as between RMK and Euronav, of their existing fee agreement as set out in the Advisory Agreement. Even if it had been, it is unrealistic to construe Mr de Stoop’s low-key rebuff, to Mr Kirk’s somewhat brazen attempt to introduce an assumption that RMK would be paid something in the region of US$ 8.5 million rather than the agreed US$ 2 million, as an implicit acceptance either (a) that RMK was doing extra-contractual work or (b) that RMK was accordingly entitled to additional fees.

Despite the very limited nature of the email exchange, Mr de Stoop and Mr Rodgers were cross-examined at length about it, with the cross-examination of Mr Rodgers also straying into assurances said to have been given on unspecified previous occasions.

It was suggested to Mr de Stoop that Mr Kirk’s comment in his 5 July 2017 email made clear that he considered RMK to be entitled to a 50 bp fee. Mr de Stoop replied that that was Mr Kirk’s opinion, and that he was ‘fishing’ for such a fee. Mr de Stoop explained his attitude to the exchange in this oral evidence:-

“Q. Now, if you thought that that was something that he was not entitled to you would have said clearly in your response "What are you talking about? You're not entitled to a fee of anything like that", at that sort of level, wouldn't you?

A. It depends on the intensity of the conversation at that time. As you can see it was an email full of different -- well assumptions that we were being – well discussing and taking into a table that would have had an impact on the NAV. At that time we were very focused on the deal and I find it -- well, very subtle but to a certain extent very sneaky to insert an increase of the fees in a bullet point in this kind of email. So I would not even consider that this was serious. I think this was fishy [fishing]. If he would've been very serious about it he would've sent a separate email. He would've read the agreement. In the agreement it is said -- it says that if you want to change the agreement you need to do that in writing, but not in the sneaky way in the middle of an email that has nothing to do with that, otherwise he's not serious about it. And that's quite frankly when Paddy and I saw that, this, we couldn't believe they were serious about it. But frankly speaking, given the intensity of the conversation and the importance of that work, you're not going to have a separate conversation with someone who is just coming in fishing.

Q. You reply to what Mr Kirk has said and you make no mention of his discussion of the RMK fee.

A. Not exactly --

Q. It's not as if point 5 goes without comment. You do reply to it, don't you?

A. Absolutely. In a way that for me is very clear that there is no room for 50 basis point for them. There's absolutely no room. …” (Day 5/160-162)

That evidence in my view accurately reflects how the email exchange should objectively be regarded. Mr Kirk’s comment, in the middle of an email dealing with expenses to be deducted from NAVs, seemingly attempted by a sidewind to engender or purportedly confirm an assumption that RMK would receive a far higher fee than it had bargained for. Mr de Stoop dealt with it at the time by making the point that there would be no room for Euronav to pay a fee of that order. Insofar as his response might be taken to involve some form of tacit acquiescence in the view that RMK would or might ultimately receive more than the US$ 2 million provided for in the Advisory Agreement, such tacit acquiescence was entirely consistent with the idea of Euronav contemplating a discretionary bonus for work done under the Advisory Agreement but which had been done well and/or which had involved more time and effort than had been anticipated at the outset.

Mr Rodgers said he would almost certainly have seen the email exchange at the time. He said:-

“I'm, my Lord, inclined to make this comment which is this is not a serious statement of somebody wanting an increase in their fees. This is both flip and glib to put this in like this in the middle of an email, somewhere between the soup and the potatoes and ask for a 400/500 per cent increase in the amount of fees you are to be paid, especially when you're a sole practitioner on the business.… ” (Day 4/143-144)

Mr Rodgers said the email was “enough to make my blood boil”, but that he did not respond himself because Mr de Stoop was handing the correspondence. He added:-

“A. … This is in order to establish different elements within a model of how a transaction might look in terms of relative value of shareholders. This is not an expression directly from a company to say I've really got to raise the matter of fees with you now or I'll stop work. I need to be paid 50 basis points or I'll stop work or this is not acceptable, I want to revise the terms of the agreement or I'll stop work.” (Day 4/145-146)

Shortly afterwards there was the following exchange:-

“And anyone reading that would understand that Mr Kirk is saying the work that we're doing is beyond the advisory agreement. And "We want a fee of 50 basis points." Isn't that right?

A. They would, yes.

Q. Indeed, that that is what Mr Kirk considers them to be entitled to?

A. And so it's -- sorry, but as I would just point out, that what -- the assertion you're making is that there was a serious claim made in this document for both an amount and the quality of work done and it's done in two lines when there's already an agreement in place that deals through transaction with fees and timing of fees and the work to be done, and this is meant to be the serious application for them -- from them, for a complete change of the agreement between us. That would seem remarkably strange to me, my Lord.” (Day 4/147)

Mr Rodgers rejected the suggestions that he did not respond himself to the email because he accepted that the work RMK was doing was far beyond the scope of the Advisory Agreement, and that he considered 50bp to be an appropriate fee for the work.

It was then put to Mr Rodgers that he had, by this stage, repeatedly assured Mr Kirk that he would be paid an appropriate fee for the work. Mr Rodgers indicated that he thought he had said that “we would take care of them” or “we’ll make sure we recognise their endeavour”, and that “it was much more conversational but it was around the word that we recognise that this had been well delivered and that we would pay a bonus” (Day 4/149). Mr Rodgers accepted that, when saying so, he did not qualify it by telling RMK that they were only entitled to US$ 2 million; but said Euronav also told RMK that they had negotiated a contract which covered the whole of the transaction. He regarded any additional payment as a bonus for contractual work that had been done very well. He was unable to say that he told RMK in terms that what he had in mind was a “discretionary” bonus, but said he never acknowledged to RMK at any time that Euronav felt indebted to make the payment to them on any other basis than a discretionary basis. Mr Rodgers concluded this part of his oral evidence by saying “[th]e fact is that they had a fully negotiated and settled agreement with us and we had said that we were going to pay them a bonus” (Day 4/157).

RMK submits that Mr Rodgers’s evidence is “fatal” to Euronav’s argument that any further payment would be a discretionary bonus, because he accepted that RMK thought they were doing work outside the scope of the Advisory Agreement, and made assurances without qualifying them by saying RMK was entitled to only US$ 2 million and that anything further would be in Euronav’s discretion.

I am unable to accept that submission. First, I do not agree that the comment in Mr Kirk’s 5 July 2017 email was, read objectively, saying that RMK was working beyond the scope of the Advisory Agreement: even if Mr Rodger did view the comment in that way (as his initial answer to the compound question at the beginning of the exchange quoted in § 145 above might seem to suggest). Secondly, statements to the effect that Euronav would ‘take care of’ RMK or recognise their endeavour are at least equally consistent with an understanding that Euronav intended to give RMK a discretionary bonus to recognise the fact that their work under the Advisory Agreement had been very good and/or successful, and/or that that work had taken more time and effort than had been anticipated at the outset. There was no need for Mr Rodgers expressly to qualify such assurances by stating in terms that any such payment would be discretionary. Nor did any such assurances imply acceptance of RMK’s apparent belief that they were doing work outside the scope of the Advisory Agreement, even if the 5 July 2017 email could objectively be construed as making that assertion.

Further discussions then took place between UBS and Mr Kirk, up to the end of July 2017, about the parties’ respective NAV calculations. These discussions required RMK and UBS to understand, among other things, (a) the numbers that made up their respective NAV calculations, (b) the values they respectively placed on the parties’ assets (primarily their respective fleets) and how those valuations were arrived at, (c) what inputs should or should not be included in assessing a company’s NAV, including whether working capital was to be included, and (d) any further sums that needed to be deducted from the parties’ NAV calculations. RMK’s evidence is that its work following the 6 July 2017 meeting included obtaining and reviewing information from UBS in relation to Gener8’s NAV, providing Acquisition Models to UBS, addressing budgeting and other queries raised by UBS, analysing Euronav’s revenue streams and FSO JV values, and populating and updating RMK’s data room housing information for the purposes of due diligence.

On the Euronav side, the further discussions included regular liaison between Mr Kirk and Mr de Stoop. The starting point for both parties was the vesselsvalue.com valuation of each vessel, in respect of which Mr de Stoop had applied discounts to reflect where the ships were built (with Korean-built ships being valued at a premium to certain Chinese-built ships), their age, and whether Gener8 had been unsuccessfully marketing them for sale.

There were also discussions between RMK and Euronav during July 2017 about the valuation of (a) Euronav’s FSOs which it operated as part of a joint venture with International Seaways, (b) its fleet on a charter-adjusted basis, as well as goodwill of long-term charter relationships that Euronav had, and (c) its ‘French Flag Business Unit’ which was a relatively niche business related to the supply of oil to the French state by French-flagged vessels.

As to Euronav’s fleet, on 4 July 2017 Mr Kirk sent Mr de Stoop a spreadsheet of charter-adjusted values, asking him to verify the charter rates/duration, double check that there were no new charters to add, and double check the market charter for the equivalent period. Mr Kirk noted that the values provided a NPV of more than $26 million for EURN in charter-adjusted value. On 6 July 2017 Mr de Stoop replied setting out the latest market assessment (time charter rates) that Euronav had obtained from Clarksons (for VLCCs) and from Braemar (for Suezmax tankers). Mr Kirk gave provided updated spreadsheets on 11 July 2017 indicating a positive value of about US$ 30 million for Euronav’s time charters compared to current market rates. Mr Kirk provided a further updated spreadsheet on 21 July 2017 after Mr de Stoop had provided the latest market assumptions to him (provided to him by Mr Rodgers/Clarksons). Following further input from Mr de Stoop later the same day, the calculation was circulated to UBS.

In relation to Gener8’s fleet, Mr Kirk emailed Euronav on 8 July 2017 to confirm the proposed value reductions compared to current vesselvalue.com values. He set out his views and suggestions as follows (which I quote in order to give the full flavour):-

“First of all, I want to mention that using VV.com is a great situation for EURN as the acquirer given that VV.com is lower than ALL equity analysts and given GNRT's higher relative leverage that hurts GNRT's NAV disproportionately to EURN.

Furthermore, we are making some additional value reductions for the GNRT Fleet (these are in addition to some other value reductions, which I will send over the weekend).

NON-KOREAN BUILT VLCC Adjustments

I have attached a spreadsheet that shows the GNRT NBs and values by ship! shipyard.

Hugo and I discussed adjusting the values based on the shipyard price difference (which I think makes a ton of sense given that the ships are only about 1yr old on average) and so it seems a fair (and effectively unbiased comparison).

You'll see that the Subic ship values need to be reduced by an additional $2.8 million per vessel in order for the parity price to compare to a $5 million shipyard difference.

The Chinese built ships currently have a $4.4 million difference? Is this enough or would the shipyard price difference be greater than this $4.4 million? If so, we should also reduce the Chinese built vessels by that amount.

VESSELS TO-BE-SOLD Adjustments

I think we keep this simple. They recently sold the Gener8 Orion, which as of July 7th (the date of our VV.com valuations) had a value of $14.69 million and they received net proceeds on the sale of $12.9 million. This is a shortfall on VV.com figures of 12.2%.

The Gener8 Daphne which they sold in March had a VV.com valuation the day prior to the sale of $11.57 million and they sold the vessel for net proceeds of $10.3 million. This is shortfall of 11.0%

I would suggest that we use 12.0% as are assumed discount on the 8 vessels to-be-sold. This means the 8 vessels in question are to be sold for the following amounts (shown with the age and scrap value of each ship — assuming scrap at $360 per ton).

[table omitted]

Please confirm the discount on the vessels-to-be-sold and let me know if there should be a further discount on the Chinese built vessels (over the $4.4 million per vessel figure).”

Mr de Stoop responded with some comments on 9 July 2017. Mr Kirk then on 10 July 2017 sent Mr de Stoop a proposed NAV calculation for Gener8, with commentary and seeking input. After further comments from Mr de Stoop, this was agreed.

As to the FSO JV, as of 14 July 2017 Mr Kirk’s figures assumed a value for this business of US$ 250 million. Presumably following a discussion with Euronav, Mr Kirk the same day sent fleet values to UBS but without the FSO JV. On 19 July Mr Kirk sent draft calculations to Mr de Stoop based on the charter rates for the units, various projected incomes, scrap value and discount rates (the data having come from Euronav). Mr de Stoop responded the same day making various adjustments, resulting in a NPV of US$ 276.2 million. Mr Kirk then proposed reducing the discount rate from 20% to 15%. The resulting calculation, stating the NPV of the business at US$ 290 million, was then sent to UBS.

As to the French Flag Business Unit, on 20 July 2017 Mr de Stoop said in an email to Mr Kirk “I would suggest to take the year 2016 revenues, deduct EUR ($900k) of cost and multiply it by a multiple of 8”. Mr Kirk replied that that rationale made a lot a sense, and sent UBS a proposed valuation on that basis.

As to long-term business relationships, Mr de Stoop explained in his evidence that Euronav had created some good will with different companies due to renewal contracts – for example, its oil major contracts had been continuously renewed for the past 10 years and would be renewed for the next 10 years – and felt they should have some value in the merger transaction. He said, and Mr Kirk accepted in cross-examination, that it was Mr de Stoop’s idea to place a value on these relationships. On 21 July 2017 Mr Kirk sent Mr de Stoop a spreadsheet attempting to calculate the value, based on a breakdown of historic revenue from long-term charterers, valuing the long-term relationships at US$24.1m using a 3x EBITDA multiple. In response, Mr de Stoop explained that had been thinking about it and trying to put himself in the shoes of UBS/Gener8. On this basis, he thought that there were two or three ways to value the long-term relationships. In the end, having considered the various methods, he thought that they should adopt a goodwill approach, putting forward the calculation method Mr Kirk had proposed, and “shoot for the moon and if we miss we will end up in the stars…”. Mr Kirk then emailed UBS on this topic, providing calculations. Mr de Stoop thanked Mr Kirk for this on 22 July. The value ultimately agreed with UBS was US$19.2 million.

On 27 July 2017, Mr Kirk sent UBS his NAV comparison on behalf of Euronav. On 31 July 2017, Euronav wrote to Steve Smith of Gener8’s independent committee explaining that Euronav had now sent UBS all its information on the NAV and given its views on Gener8’s NAV; if Mr Smith wanted to continue discussions with Euronav, then the next step was for his team to compile a list of points and principles that were agreed, and more importantly, things that required further discussion; once that was provided, a meeting should take place between Euronav and Mr Smith to allow the parties to explain their views face to face.

Mr Smith agreed with that approach, and on 4 August 2017 sent a document setting out points of difference on the NAV, and two areas in particular where Gener8 required additional information in order properly to assess Euronav’s NAV: the French Flag Business Unit and Euronav’s time charter adjustments. Mr de Stoop forwarded this to Mr Kirk, who responded the same day with his comments on the various contested and agreed items relating to Gener8’s and Euronav’s respective NAVs. On 12 August 2017 Mr Kirk sent Euronav a further revised spreadsheet of charter-adjusted values for Euronav’s fleet, with commentary, as well as a spreadsheet about a proposed sale and leaseback transaction involving Gener8 vessels. Mr de Stoop replied indicating that he was fine with Mr Kirk’s approach, subject to a point about Gener8 operating expenses, leading Mr Kirk to re-run the analysis on 14 August.

A meeting then took place on 17 August 2017 between Mr Rodgers and Mr de Stoop for Euronav, Steve Smith for Genr8, and Mr Kirk at which several points were agreed as to the NAV calculations. A limited number of items were left to be agreed, including (a) the discount to be applied in respect of certain vessels from the vesselsvalue.com value, (b) the charter-adjusted value for Euronav’s fleet, (c) the value of the FSO units, (d) the value of the French Flag Business Unit, and (d) the value of long-term charter relationships. Mr Kirk on 18 August sent an email aiming to summarise the outcome, which he said reflects the NAV discussion on Thursday with Euronav management and Steve Smith”.

One of the points agreed at the 17 August 2017 meeting was that each side would be responsible for their legal, financial and other advisors’ fees on the transaction. By this stage, Euronav’s stated estimated deal fees, as reflected in the NAV analysis sent to UBS on 26 July 2017, had been reduced to US$ 6 million.

Mr Kirk’s evidence was that, during the 17 August meeting, Mr Smith of Gener8 queried the US$ $6 million allocation on the Euronav side, remarking that RMK’s fee could not have been included in that figure as it would never be sufficient to cover M&A advisory work for a deal of this magnitude. Mr Kirk described the moment as “awkward”. Mr Kirk said Mr Smith added that if he had known that Euronav’s M&A advisor would be present at the meeting, then he would have brought his own. Mr Smith’s written evidence was to similar effect: he said he had been surprised to see Mr Kirk at the meeting because he had always taken RMK to be acting as Euronav’s M&A advisers on the transaction; and that, had he known RMK would be present, he would have arranged for UBS to be there too.

Mr Rodgers said in his statement and his oral evidence that he did not recall those things having been said, and would have been surprised by the enquiry. Mr de Stoop in cross-examination did not recall specific mention of RMK’s fee, but recalled that Mr Smith was asking a number of questions about the fees and thought Euronav’s overall figure seemed very low, especially because on their side the figure was more than US$ 10 million. I consider it likely, in light of this evidence taken together, that Gener8 queried at least the overall level of RMK’s fees. That may well have triggered the post-meeting discussion considered below.

Mr Kirk’s evidence was that after Mr Smith left the meeting, Mr Kirk raised the issue of RMK’s fee with Mr Rodgers and Mr de Stoop. Mr Rodgers asked what RMK expected.  Mr Kirk suggested a fee in excess of $10 million, to which Mr Rodgers responded aggressively: “If you ever say that again, we will stick to the contract.”  Mr Kirk said in his witness statement that “given [Mr Rodgers’s] aggressive response, I did not push the matter any further because there was a lot of work left to be done (nearly a year’s worth) and I figured they would better understand the figure when they saw the workload”. In oral evidence, Mr Kirk added that there was fortunately no need to press the matter further after Mr de Stoop’s email the following day (see section (E)(11) below).

Mr Rodgers in his witness statement said that, while it was difficult to recall whether he used those exact words, he did not disagree that he made clear that Euronav were entitled to stick to the Advisory Agreement when it came to remuneration. Euronav were open to the possibility of making a discretionary payment to RMK at the end of the transaction, but one which was reasonable in the circumstances and reflected the fact that Euronav and RMK already had a remuneration structure in place. In his oral evidence, Mr Rodgers said the alleged conversation referred to above “nicely characterises the conversations I had with RMK over this course of action”, and remembered having a conversation along those lines, though he could not remember when it took place. He did not accept that he was thereby acknowledging that RMK was doing work outside the scope of the Advisory Agreement, and said the reason for asking Mr Kirk what he thought the fee should be would have been that Mr Rodgers wanted to know what Mr Kirk was thinking. Challenged on that point, he said:-

“A. I think it's very important whenever you're paying bonuses or making any payments that you'd like to know how they're going to land. So I don't think it's unreasonable to ask them what their expectation might be.”

That is, to my mind, entirely cogent. Mr de Stoop said that, having been reminded of it in cross-examination, he remembered the conversation taking place though not where or when. I consider it probable that Mr Rodgers did saying something along the lines quoted in § 164, mostly likely in the discussion immediately after the 17 August meeting with Gener8.

RMK submits that (i) any reasonable person in Mr Kirk’s position would believe that, by asking what he thought the fee should be, Mr Rodgers was acknowledging that RMK was “entitled to additional fees for additional work”¸ and (ii) the necessary implication of Mr Rodgers’ threat to stick to the contract was that the parties were not sticking to the contract and would continue not to do so, and that the Advisory Agreement constrained neither RMK’s work scope nor its remuneration.

I disagree. The most natural interpretation of Mr Rodgers’ response is that Euronav considered itself entitled to stick to the Advisory Agreement (i.e. RMK was not entitled to further fees), that Euronav was willing to contemplate a discretionary bonus, but that Euronav would not be willing to pay one if RMK continued to be excessively ambitious about the amount it might receive. I do not consider Mr Rodgers’s response to have indicated any acceptance that RMK was working beyond the scope of the Advisory Agreement or that it had an entitlement to additional payment. Further, the exchange lends support to the view that (a) RMK had not taken the 5-6 July 2017 email exchange as an assurance that Euronav would pay it a 50bps fee, and (b) even if RMK had done so, the 18 August 2017 conversation made clear that Euronav in fact had no such intention.

RMK submitted in its written closing that, even if it is wrong about its construction of clause 1.1(v) of the Advisory Agreement, Euronav is estopped from relying on this, citing Particulars of Claim §§41 to 42. This suggestion does not appear to have put forward at any other point during the trial, and was not developed in any oral submissions. Paragraphs 39 to 42 of the Particulars of Claim allege:-

“39.

Following the provision of the deal fees and expenses schedule to UBS, on 17 August 2017, Mr Rodgers and Mr de Stoop and Mr Kirk met in London with Mr Steven Smith who was a Gener8 Board Member and head of its Transaction Committee to discuss the share ratio for the merger.

40.

After this meeting, Mr Kirk discussed the topic of fees with Mr Rodgers and Mr de Stoop and stated that RMK would require an additional payment for the M&A work

being done on behalf of Euronav. Euronav advised that they could not agree to a particular figure but represented and confirmed that they would ensure that RMK received a fee that would remunerate them for the M&A advisory work that was being done.

41.

In the premises, Euronav and RMK agreed and/or it was their common understanding, which was mutually expressed and/or Euronav represented that:

41(1) RMK would continue to serve as Euronav’s M&A advisor until the merger was completed;

41(2) RMK would provide services over and above those stipulated for in the original Advisory Agreement

41(3) RMK would therefore receive a fee over and above that payable to RMK Europe under the original Advisory Agreement.

42.

RMK relied on Euronav’s representations to this effect in carrying out the work set out below.”

In my view, the evidence does not show that any of the representations alleged in Particulars of Claim § 41 was made. The gist of what Euronav was, rather, as indicated in § 167 above. The alleged estoppel therefore does not get off the ground.

The following day, 18 August 2017, Mr de Stoop sent Mr Kirk an email headed “Company Specific Transaction Expenses” saying:-

“We need to include a fee to be paid to Navig8 to take the ships out of their system early.

As far as that item is concerned for Euronav, I suggest to increase it to $10m. This should cover the fairness opinion as well as the slightly more complicated Transaction structure (we already made progress with lawyers) and Tax consultancy. RMK fee will be what it will be but as far as this exercise is concerned we stick to the contract we have and that can be DD [i.e. the subject of ‘due diligence’ checks] by the other side.

Could you send me what you intend to send to UBS.”

The ‘exercise’ referred to was, once again, the calculation of the parties’ respective NAVs for merger pricing purposes. Euronav had an incentive to minimise its estimated fees so as to maximise its NAV. Thus, RMK says, Mr de Stoop email must have been a response to the discussion the previous day about RMK’s fees, and Mr Kirk said he took it as an increase in RMK’s fee to US$ 10 million, understanding that “every bit of that increase was for RMK”.

However, the email did not say that, and it would have been directly contrary to Mr Rodgers’ vehement rejection the previous day of the notion that RMK would end up being paid as much as US$ 10 million. The reference to RMK’s fee being “what it will be” was consistent with the possibility of Euronav deciding to pay RMK a discretionary bonus. Mr de Stoop in cross-examination gave this evidence:-

“A. It's -- it's too long ago but I suspect that we were very pleased with the work that RMK had done. We have a tradition at Euronav to pay bonus when we are very happy about work that people do. And so indeed I am pretty sure that we were intending to pay a bonus.

Q. Well, let's take it in stages. First of all you accept that this was a recognition on your part that Euronav would pay RMK more than $2 million. Isn't that right?

A. I think that was our discretion and it remains or it remains our discretion. So no decision had been made.

Q. But again, when you spoke to Mr Kirk about the subject of fees, you did not say to him that any additional payment would be discretionary, did you?

A. I didn't say the contrary either.” (Day 6/11)

RMK suggests that because Mr de Stoop did not expressly state that any additional payment to RMK would be in Euronav’s discretion, his message should be taken as an acceptance that RMK was entitled to further payment and that the increase from US$ 6 million to US$ 10 million was in order to pay RMK more. That simply does not follow. Even if part of Mr de Stoop’s thinking in increasing the allowance was to allow some ‘headroom’ to pay RMK a bonus, his message cannot reasonably be construed as an acceptance that RMK had any entitlement to additional fees or that it was performing extra-contractual work. In addition, Mr de Stoop had the previous day said, as part of the evidence I quote in § 114 above, that it had been mentioned on several occasions that any additional payment would be discretionary. Even though he was unable to say that he made that point positively on this particular occasion, it must be viewed in the context of his evidence about the tenor of the discussions as a whole.

Further NAV discussions continued between UBS and Mr Kirk (working closely with Mr de Stoop in particular), during which the parties addressed (a) the valuation of Euronav’s FSOs, (b) the valuation of the parties’ respective fleets (with the parties ultimately agreeing to obtain valuations from the ship broker Clarksons, rather than relying solely on the valuations obtained from vesselsvalue.com), and (c) the charter-adjusted valuations of their respective fleets, which the parties agreed would be carried out by reference to Clarksons valuations. RMK also continued to liaise with Gener8 and various of its shareholders.

On 19 August 2017, Ms Qi of UBS queried the 8.5x EBITDA multiple that RMK had applied in respect of the French Flag Business Unit, which Mr Kirk discussed internally with Mr de Stoop. This resulted in Mr Kirk’s response to Ms Qi on the same day. On 27 September 2017, Mr Kirk sent a NAV analysis, one element of which was an “assumed ‘middle-of-the-road’ agreement” on a 6x EBITDA multiple. After Mr Kirk obtained Mr de Stoop’s sign off to send to UBS, this multiple was applied in the NAV calculation circulated on 28 September 2017. This multiple was accepted by UBS and represented value of US$49.2m for Euronav. Whilst RMK opened the case on the basis that this was one of the areas in which it had provided ‘valuation advice’ to Euronav, it is evident that that was not the case. Mr de Stoop’s evidence was that RMK had no role in determining the value of the French Flag Business Unit, beyond plugging in figures which Mr de Stoop had negotiated into the model, and that Mr Kirk did not really understand the unit. Mr Kirk accepted in his oral evidence that concept of placing a value on the French Flag Business Unit, and the data for calculating it, came from Euronav; and Mr Kirk then calculated an EBITDA figure, presented the figures to UBS and debated the EBITDA multiple with them. Mr De Stoop may have gone slightly too far, at one point in his cross-examination, by using the term “postman” to refer to RMK’s role in this part of the transaction, I consider that the documents support his evidence that it was an area of particular sensitivity in which he, Mr De Stoop, played the major role.

In the meantime, further thought was given to transaction structure. On 20 August 2017 Mr Kirk updated the 9-Pagers (Pitch Book), setting out the proposed structure of the deal as a share-for-share merger, with a private placement to raise financing in order to ensure post-merger liquidity. He also noted that if Euronav decided to sell six of its Chinese-built vessels, then a capital raise through the proposed private placement would be unnecessary. Further updates to the 9-Pagers were made on 5 and 9 September 2017 on the alternative bases of (a) a share-for-share merger with a private placement, and (b) a share-for-share merger and the sale of the six Chinese-built vessels.

The 9 pagers were ultimately used as part of the material sent to Euronav’s Board on 10 September 2017 to explain the potential financing structures for the acquisition.

On 23 August 2017, Mr de Stoop emailed Mr Kirk the latest NAV calculation, and stated, “To do: Charter Adjustment Value: Broker to opine.” Mr Kirk provided a “realistic transaction NAV” to Euronav on 26 August 2017. Clarksons on 11 September 2017 provided an aggregate charter adjusted value of US$41.25 million, based on inter alia four newbuilds being given a charter-free valuation of US$60.5m each and a charter-adjusted valuation of US$65m each, giving a charter-adjusted value (i.e. the aggregate positive value of the time charters compared to market rates) for those four vessels of US$18 million. Mr Kirk told Mr de Stoop by email on 11 September 2017 this that was far lower than ‘our’ figure, which used a total charter-adjusted value of $54 million for the newbuilds. Mr Kirk on 13 September provided an “updated file on the charter adjusted value”, proposing various adjustments to the Clarksons valuations, and suggested that Mr de Stoop should push back with Clarksons in relation to them. Euronav then discussed the valuations with Clarksons, and Mr de Stoop told Mr Kirk later that day that “We made good progress this morning when we spoke to them…let’s see what they come up with.” On 20 September 2017, Mr de Stoop reverted to confirm that Clarksons had increased their valuations. The valuations increased to US$60.5m per vessel charter free, and US$71m per vessel charter-adjusted, equating to an aggregate charter-adjusted value of US$ 42 million for the four newbuilds. Mr Kirk commented on those valuations on 21 September 2017. He provided Euronav with an updated NAV analysis, using Clarksons’ values, on 27 September 2017, which was then sent to UBS on 27 September 2017. Following comments from UBS, Mr Kirk made some negotiating suggestions to Euronav on 2 and 4 October 2017. The overall charter-adjusted value ultimately agreed with UBS was US$ 65.3 million.

Mr de Stoop’s 23 August 2017 ‘to do’ list also included an entry for the FSO JV, saying To be agreed and according to Steve we could meet in the middle $250-$265m”. Mr Kirk sent Mr de Stoop an updated DCF (discounted cash flow) analysis of the value of the FSO JV on 25 August 2017 following a discussion. UBS on 29 August valued Euronav’s 50% share of the joint venture at US$ 250 million. On 30 August 2017, Mr Kirk asked UBS for more information, and updated Mr de Stoop on progress. On 31 August and 5 September, Mr Kirk worked with UBS to create an “apple-to-apples” FSO JV valuation to seek to resolve the parties’ differences, as Mr Kirk reported to Mr de Stoop. UBS noted that RMK’s numbers did not appear to cover any tax liability, and on 6 September, Mr de Stoop asked Mr Kirk to build tax liability into RMK’s model. On 6 September, Mr Kirk sent updated calculations to UBS. As discussed in advance with Mr de Stoop, he told UBS that these reduced the average expected value of the business to US$ 286.1 million, and that Euronav management were willing to move as low as US$ 277 million. On 7 September Mr Kirk added that he had just spoken to Euronav management and that “[t]he request is, whatever your proposed FSO value, that UBS comes back with a detailed explanation of how that number was calculated”.

It appears that UBS suggested that Euronav check with its JV partner, International Seaways, why it valued the JV lower, viz US$ 250 million per 50% share. Mr de Stoop did contact International Seaways to enquire about its valuation, and International Seaways explained that the figure was “only marginally meaningful... [and] was set a level slightly lower than the value we used for accounting purposes at December 2016.” They also explained that they did this to avoid push back from the lender group. Mr de Stoop updated Mr Kirk on 15 September 2017 about his discussions with International Seaways, including how International Seaways calculated the value on its internal model (which showed a value higher than US$ 250m), and explained that Euronav had “tangible arguments with what UBS used against us”.

In the meantime, Mr de Stoop on 12 September 2017 contacted Steve Smith of Gener8 direct, noting that “we feel that our respective advisors have made good progress but have reached their limits on a few items” and suggesting a call. On 15 September 2017, Mr Smith of Gener8 contacted Mr de Stoop direct to discuss the FSO value. Mr de Stoop explained aspects of his discussions with International Seaways to Mr Smith and explained that Mr Kirk was in the process of sending two models to UBS (one built on International Seaways’ assumptions and one built on Euronav’s model with different facts and assumptions. Mr Kirk carried out the proposed calculation comparisons. The calculations on Euronav’s model resulted in a value of US$296m in the event that the charter for both FSO units were extended, and US$252m if only one was extended. The average resulted in US$274.1m. Mr de Stoop was happy with the calculations and drafted an email for Mr Kirk to send to UBS explaining the calculations and International Seaways’ US$250m valuation in the debt raise. However, instead of taking the average of US$274.1m and thereby accounting for the possibility that only one of the units would be extended, Mr de Stoop relied on the US$296m figure assuming that both units would be extended. He explained to Mr Kirk that he did not want to accept “the possibility of only vessel being extended. Leave that to them to come back with if they so wish”. Mr Kirk sent the email to UBS in substantially the same terms as drafted by Mr de Stoop.

On 19 September 2017, Mr Smith contacted Mr de Stoop informing him that the UBS model produced US$245m but “I am convinced that if you change the opex and a couple of other key assumptions I can get my head around the $277mm in RMKs last analysis. For the sake of moving this forward would you guys be willing to move on to Clarksons if we just agree to put a pin in FSO at $277m?” The same day, Mr de Stoop confirmed to Mr Kirk that he had sent an email to Steve Smith accepting a valuation of US$277m for the FSO business: “In the end, I sent an email to Steve about the FSOs…here is his reply with which we will agree…I will need to let him know that we agree so don't speak to UBS before receiving our green light please”.

Looking back on the FSO valuation issue, Mr de Stoop said in his witness statement:-

“Higher valuation on Euronav’s FSO assets (US$32 million). This is calculated the same way as I described in paragraph 39.5 above [relating to charter-adjusted vessel values]. However, Euronav carried out an initial calculation which we could use as a “prediction”. Therefore, RMK took the charter information (charterparty, current rate, remaining period and market rate etc) and placed it in a spreadsheet which set out the predicted charter value. RMK therefore did help us run this analysis, but this was an element of the model. In comparison, I had to explain to Steve Smith (Gener8) why the FSO assets were so valuable to the clients of Euronav, that they would extend the contract with minimal discount. This is because those FSO were tailor-made for this particular oilfield and finding a replacement would have been extremely difficult. In the end we got Steve Smith to agree to Euronav’s overall increase in value. RMK did not take this information and negotiate the figures with Gener8 on our behalf.”

In his oral evidence, in substance he maintained that the negotiation was primarily driven by him, with Mr Kirk providing support rather than advice, and that his own conversations with Mr Smith of Gener8 were key to the outcome. I found his evidence on this matter plausible and consistent with the documents, and I accept it. Although, as the above summary shows, there were discussions between RMK and UBS about the FSO JV value, they took place in close liaison with and under the direction of Euronav, and in the end the crucial discussions took place between Euronav and Gener8 direct.

On 9 October 2017, Mr Rodgers sent Mr Kirk a draft exclusivity agreement (whereby Euronav and Gener8 agreed to continue to discuss the transaction on an exclusive basis until closing) and term sheet from Seward & Kissel. Ms Goris sent drafts containing inter alia Mr Kirk’s comments thereon to Seward & Kissel on 11 October 2017. On 12 October 2017, Mr Kirk provided further comments on a new iteration of the exclusivity agreement he had received that day. Mr Goris relayed those and other comments to Seward & Kissel on 18 October 2017.

On 6 and 9 October 2017, Euronav (Mr Rodgers and Mr de Stoop) and Steve Smith, and their respective advisors, held further discussions with a view to resolving all outstanding matters in respect of the NAV calculations. In the evening of 6 October 2017, UBS sent RMK its NAV summary. Mr Kirk emailed Mr de Stoop stating, “The UBS numbers are consistent with mine”, with one exception, concerning Euronav’s long-term relationship value, which Mr Kirk and Mr de Stoop discussed. On the morning of 9 October Mr de Stoop updated Mr Rodgers saying:-

“As you may have seen over the weekend, the difference in NAV (ratio) comes to exactly the same result as the LT value relationship. Ratio becomes 0.725!

I feel that the best way to get to that ratio is to send Steve a message ahead of our call making three following strong arguments (that I list below in a proposed draft email) so that right when we jump on the call he will have to come with three justifications (defensive) rather than just pretending he spoke to a few funds who are making his life difficult...”

and setting out a proposed message to Gener8 about the remaining point of difference.

Mr de Stoop told Mr Rodgers the same day that he had instructed Mr Kirk to send a new spreadsheet to UBS for mutual agreement. Mr Kirk ran a final adjustment past Mr de Stoop in relation to restricted stock units or RSUs, which they discussed on 10 October 2017. This led to an email from Mr Kirk to UBS attaching an updated NAV summary reflecting the fact that RSUs and performance stock units (PSUs) would likely be settled in cash, resulting in a ratio of 0.7272, which Mr Kirk asked UBS to confirm.

UBS reverted on 11 October 2017 stating “we don’t believe modelling [RSUs] as cashed out is the right treatment” and suggested its reinstatement, which resulted in an increase to the exchange ratio of 0.0002x. Mr Kirk forwarded UBS’s position to Mr Rodgers and Mr de Stoop, commenting, “Since the PSU's have to be settled in cash, I suggest we go back to them with that change (and let them count the RSU's as they are). This makes the ratio 0.72728x. Are you good with this?”. RMK emailed UBS later that evening maintaining that RSUs and PSUs should be deducted from the cash balance. UBS continued to take issue with this, but after Mr Kirk provided further justification and said Euronav was insistent on the point, UBS agreed to disagree and to “take the deduct in cash” and later confirmed that “Excluding the impact on RSU treatment, 0.7272x is fine”. Mr Kirk reported this outcome back to Euronav, and likewise confirmed to UBS that the deal ratio was confirmed, with each Gener8 share receiving 0.7272 Euronav shares. The deal ratio had now been agreed: the ratio implicit in the NAVs was that the Gener8 shareholders would receive 0.7272 Euronav shares for each of their Gener8 shares in the post-merger entity.

From Euronav’s perspective, the ratio was NAV accretive deal because of the additional value that it was able to obtain in the NAV calculations by reference to the value that was assigned to FSOs, Euronav’s long-term charter relationships, and its French Flag Business Unit.

Following agreement of the deal ratio, during the remainder of October 2017 the parties’ respective teams sought to agree:-

On 17 October 2017 RMK provided an updated model to Euronav following a request from Mr de Stoop on 15 October in connection with some board papers.

The Exclusivity Agreement was signed by Euronav on 2 November 2017.

On 3 November 2017, Mr Kirk emailed Euronav raising action points from a call with UBS, including on due diligence and the drafting of the sale purchase agreement, after which he had a call with Mr de Stoop, as reflected in an email from Mr de Stoop. On 17 November 2017, ahead of an “SPA Strategy” call with Euronav and SewKis, Mr Verbeeck asked RMK to consider any other agenda points required for that meeting and asked Mr Kirk to “hold the pen on the agenda”. There is no indication, however, that RMK had any substantive input in the question of the proposed contents of the SPA.

In the meantime, Euronav had begun to consider in earnest how it would allocate its resources in respect of the proposed transaction through to completion. On 27 October 2017, Stamatis Bourboulis, a General Manager at Euronav sent a message to Mr de Stoop, Mr Rodgers, and Euronav’s General Counsel, Mr Verbeeck, setting out the allocation of Euronav personnel in respect of (a) due diligence, (b) project management from the signing of a sale and purchase agreement to closing, and (c) integration of the two companies. It is evident from this document that Euronav envisaged deploying significant manpower on the due diligence exercise.

The due diligence exercise commenced in early November 2017 and took up the remainder of November 2017 and December 2017, until the Agreement and Plan of Merger was eventually signed on 20 December 2017 and announced on 21 December 2017. On 2 November 2017, UBS asked RMK for Euronav’s Diligence Request List. Mr de Stoop informed Mr Kirk on 3 November 2017 that Euronav and their US lawyers, Seward and Kissel, had already done some due diligence work and would revert the following week. Data rooms for Euronav’s and Gener8’s due diligence requests, which were the gathering places for documents collected and required to execute the deal, were made accessible to 58 people on Gener8’s side and 38 people on Euronav’s.

Euronav personnel and SewKis prepared the due diligence lists, set up the virtual data room, considered the documents that Euronav needed to include in response to Gener8’s due diligence list, and reviewed the documents provided by Gener8. RMK was also involved in the exercise. It liaised between the Euronav side and UBS in organising the due diligence exercise, provided its assistance to Euronav in respect of documents that it had already provided to UBS during the NAV discussions, ensured that the material included in Euronav’s virtual data room was compatible with the information that had been relied on vis-à-vis UBS in the NAV discussions, and, through Ms Motyka of RMK, monitored the data room tracker for both sides. RMK made sure that the data room trackers were updated to keep pace with Euronav’s due diligence queries, and that UBS’s queries were being resolved (e.g. by document uploads). The trackers were sent twice weekly to Euronav and the UBS team (UBS being responsible for Gener8’s data room tracker). The final versions of the trackers were substantial: the tracker for Gener8’s requests contained c.180 items, and that for Euronav’s requests contained c. 150 items. Ms Motyka also managed the uploading of documents into data rooms. Ms Motyka estimated having spent about 230 hours on due diligence, particularly from 27 November 2017 to 19 December 2017.

In parallel, Mr de Stoop emailed RMK on 3 November 2017 saying: “Finally, we need to work on a model and a pro forma financials of the combined group to present to banks but also the market in general. RMK proposed and agreed to change their model from proportionate to Equity method to be aligned with the way we present our numbers”. This work (described by Mr Kirk in cross-examination as a “pretty large undertaking”) was intended to enable the transaction to be understood by lenders and Euronav’s auditors KPMG, who were to provide a fairness assessment. Mr Keros, a junior colleague of Mr Kirk’s at RMK, provided this model on 16 November 2017, and an updated model on 21 November 2017.

On 21 November 2017, there was a call between Euronav, its lawyers and RMK during which the share purchase agreement was discussed, though the agenda indicates that the aspect for discussion was merely “first delivery by buyer”.

In emails of 28 November 2017, Mr de Stoop asked Mr Kirk to provide an overview of pool fees for vessels participating in the VL8 pool if they remained up to closing (expected 30 June 2018), which “is a critical item for us before signing the SPA” because the idea was to transfer the ships to Euronav’s own pool as soon as possible after signing the SPA. Mr de Stoop also requested information about the notice period for exiting the VL8 pool, the number of vessels with remaining tenures of less than 1 year/9 months, and the money the VL8 pool would lose in the event of early termination. RMK reverted to Mr de Stoop the same day. Separately, Ms Motyka on 28 November provided some information about the employment of Gener8 personnel. This followed Euronav having asked RMK to look into employment contracts and consultancy agreements to see how best they could be terminated in order to reduce costs. Also the same day, Mr de Stoop asked Mr Kirk to send the breakdown of outstanding shares in Gener8, per Mr Kirk’s discussion with UBS, including options and RSUs. Mr Kirk responded later that day setting out “how we calculated the number of GNRT shares for the ratio”.

On 10-11 December 2017, Mr de Stoop asked for and Mr Kirk provided his views on options and RSU for the purposes developing the Sale Purchase Agreement, the focus being whether it would be better to settle them in cash at closing or including their value in the contribution in kind process i.e. the share for share exchange (which might make the process more complicated).

Also in November 2017, Mr Kirk considered the potential impact of Gener8’s VLCCs leaving the VL8 Pool and being moved to the Tankers International Pool. This required additional work on the acquisition model plus additional review and analysis of Gener8’s own model.

Mr Kirk stated that he raised the issue of fees again with Mr de Stoop on 1 December 2017. Mr Kirk’s evidence was that Mr de Stoop responded: “Let’s see if the deal ever happens”, which RMK says it interpreted as Mr de Stoop acknowledging its entitlement to remuneration but expressing its desire to wait until the Gener8 VLCCs had left the VL8 Pool and been moved to the Tankers International Pool.

In his oral evidence, Mr Kirk said his recollection was that Mr de Stoop’s comments related to the Pools, and that he said “Well, I don’t even know if they’re going [to] agree to the pools, in which case this deal might not happen, so let’s just see if the deal happens”, or something to that effect. He accepted that this exchange did not take matters further. RMK nonetheless relies on it as evidence that the question of fees remained open and that Euronav had not closed the door on additional remuneration. Even on that basis, however, the exchange was consistent with Euronav’s position that, whilst RMK was not entitled to further remuneration, Euronav was intending to pay some form of discretionary bonus after the transaction closed.

RMK obtained Gener8’s internal model on 1 December 2017. RMK compared this with the model it had created to determine whether the inputs in each resulted in the same output, in parallel with UBS carrying out the same analysis. Mr Keros provided Mr Kirk with updated models on 7 December 2017 and 18 December 2017.

On 5 December 2017, Mr de Stoop asked Mr Kirk to send him the list of ships on which some of Gener8’s borrowing, from Blue Mountain, was secured (i.e. that the note needs to be repaid in case 2”), and whether the note contained a change of control clause. Mr Kirk responded the following day, including attempting to answer some follow-up questions.

Due diligence continued into December and was completed on 20 December 2017. Further work was done on Gener8 vessel lists, values and charter values. RMK continued to attend joint meetings with Euronav and UBS. During the due diligence phase RMK also provided input on the draft Sale Purchase Agreement.

On or around 20 December 2017, Mr de Stoop asked Mr Kirk to assist with a press release announcing the merger between Euronav and Gener8. On 21 December 2017 the RMK and Euronav finalised the press release and, on the same day, the Boards of Euronav and Gener8 agreed a stock-for-stock merger of the entire share capital of Gener8. The press release contained the following wording:

“RMK Maritime is serving as financial advisor to Euronav’s Board of directors.”

Euronav thereafter requested RMK to refine the Acquisition Model and assist with debt rollover discussions.

On 28 December 2017, RMK invoiced Euronav and was paid US$1 million.

On 18 January 2018, Mr Kirk sent a detailed email to Mr Rodgers and Mr de Stoop on the subject of fees. In order to provide the complete picture, I set it out in full below:-

“As suggested by Hugo in New York last week, I am putting my thoughts in writing with regards to the RMK M&A fee assuming the Transaction closes.

We obviously discussed a figure in the Euronav conference room in London in August, which per your request I won't repeat. I do want to supply some supporting material though, for what we believe to be an appropriate market fee by Euronav standards.

1.

As you know, we have been working on this Transaction since at least January 2016 (the first EURN/GNRT model we built) and we have been under mandate since July 2016. The Transaction is expected to close in Apr/May 2018, so we are looking at just over or just under 2 years of work — whether we use the January 2016 or July 2016 date.

More importantly, when we signed the original agreement in July 2016, we expected

• to be proceeding with a bid in the fall of 2016

• that EURN would need to hire another investment bank or banks — per your messaging to us

As we know the Transaction took another year + and RMK provided the sole buy-side investment banking services.

2.

Due to this substantial increase in the time/scope of work, RMK applied significant resources from eight RMK employees over this 2+ year period to advise EURN on this Transaction. As this was a "buy side" advisory mandate, it carries a lot of risk that a transaction may not be completed and thus the likelihood is high that the work will be done in vain. Unlike lawyers and consultants who are paid regardless of the outcome, we absorb this significant risk. As long as the fee represents multiples of non-risk expense, then it can be a reasonable business to undertake in. If not, it is bad business as we make the same wages as lawyers/consultants who do not take on those risks. Clearly, RMK thought that Euronav was the best bidder from the beginning, but in light of Frontline, Quantum Pacific, INSW, Peter G, Navig8, other recalcitrant board members and finally (and maybe still) COSCO, the Transaction success potential (at engagement) represented a chance of less than 25% (which is still very high for buy-side standards). We could compare this to UBS, who knew that their likelihood of a sale (which had been decided by the GNRT Board) to someone was HIGHLY likely (say 85%).

3.

It goes without saying we hope you believe we did a good job. In acting as the sole advisor to EURN, we provided the financial modeling and analysis, presentation work, data room coordination, diligence, etc. However, your choice to use RMK as opposed to a bulge bracket is in part because we provide a differentiated service which carries value. I would like to flag a few key areas where I think that RMK proved this value throughout the process:

• Confidentiality — despite a 2 year process, nothing was leaked

• Negotiation of value — to be clear, EURN deserves the majority of the credit for this, but I do believe that RMK's analysis behind some of the 'soft' value aspects of the EURN NAV were instrumental in achieving their acceptance

• Liaising with investors — having a pulse on what certain investors were thinking, primarily BM and BlackRock

• Intelligence gathering — RMK was able to glean key information about certain other bidders and shared the names/information with Euronav, which helped EURN to 'play its cards' from a position of knowledge

4.

You could hold us to the contract signed back in 2016 and thus minimize the fee paid and if this were a one-time game that (despite inherent unfairness in our view) could be the smart business decision. However, this is not a one-time game, which is evidenced by the fact that we completed deals for Euronav in late 2013 and early 2014. RMK felt fairly compensated in those Transactions and as a consequence continued to work hard for Euronav by bringing well-developed ideas (even the ones you didn't like) and opportunities, including this Transaction. We certainly feel this is multi-stage relationship where RMK continues to provide ideas and opportunities (i.e. shareholder value) to Euronav on an ongoing basis. In light of the above, by achieving a fair fee on this Transaction, we can feel confident that going forward if we provide genuine value we will be fairly compensated and thus highly motivated to continue to bring value to Euronav and its shareholders.

We would be more than happy to discuss any or all of the above in more detail and look forward to your feedback.”

Asked about this message in cross-examination, Mr Kirk said:-

“I think it's important to just mention that, you know, when this email is sent, we were -- you know, we wanted -- the deal had just been announced, so we're in the most positive situation possible. We have a great relationship with these guys, everything's fantastic. We're getting calls of congratulations, they're getting calls of congratulations. This is a great deal, everyone's very happy. And so I'm not, you know, sending an email with any view towards litigation here. I'm explaining to them, "Hey, we did a lot of work beyond the contract; in fact we were the sole side M&A advisor. Here is some of the work we did that was beyond the contract". And then -- you know I wish I hadn't said that, but what I -- I don't mean that they could legally do it; I just mean they could do it, which they ultimately did, and that's why we're here today.” (Day 2/109-110)

No doubt there were good reasons for Mr Kirk to express himself diplomatically, as he did in this email. Nonetheless, the statement in the final section to the effect that Euronav would be strictly entitled to pay RMK no more than the fees set out in the Advisory Agreement is difficult to square with any joint understanding that RMK had been doing extra-contractual work for which it would be entitled to payment. It is also notable that Mr Kirk in this email noted that Euronav deserved the majority of the credit for the successful NAV negotiations, somewhat in contrast with RMK’s claim in the present proceedings to have procured, largely by its own efforts, a favourable deal ratio for Euronav.

Mr Kirk re-sent the email in April 2018, when it remained Mr Kirk’s view that, as he put it in cross-examination, “we should be getting an 8-figure fee”.

In January 2018, after the signing of the Agreement and Plan of Merger, the focus turned to closing the deal, which included Euronav seeking the rollover to itself of (a) a facility that Gener8 had with KEXIM/KSure for the purpose of financing Gener8’s modern Korean-built vessels, and (b) a facility that Gener8 had with CEXIM. The rollover of Gener8’s loans to the merged entity was a significant commercial issue for Euronav, without which Euronav would have had to raise new debt. Mr de Stoop had on 26 October 2017 asked Mr Kirk to provide a list of banks participating in the KEXIM/KSure facility, to produce an amortization schedule starting in the 4^th quarter of 2017, and to check whether there was an early repayment penalty. Mr Kirk reverted that day, indicating among other things that the lenders included Citibank and Nordea.

The KEXIM/KSure facility had several tranches – (a) a tranche provided by commercial banks, (b) a tranche provided by commercial banks but guaranteed by KEXIM, (c) a tranche funded entirely by KEXIM, and (d) a tranche provided by commercial banks but underwritten by KSure. The facility was entered into by Gener8 with Citibank and Nordea as agents. Euronav eventually agreed the rollover of the KEXIM facility on 28 March 2018.

The CEXIM/Sinosure facility was entered into with Citibank, CEXIM, and the Bank of China, partly for the purpose of refinancing the building of 6 Chinese-built vessels that Euronav had negotiated to sell to International Seaways as part of the merger transaction. The sale of those vessels was negotiated directly between Euronav and International Seaways, to close at the same time as the merger, and took the form of a Stock Purchase Agreement dated 18 April 2018. Accordingly, International Seaways, who would take the benefit of the CEXIM facility, deal direct with CEXIM/Sinosure about this facility.

Euronav’s case was that it was advised in respect of the rollover of the KEXIM/KSure facility by Citi and Nordea, although at various points it sought RMK’s assistance in providing financial information concerning the merger and the combined post-merger entity which was required for the rollover discussions. RMK at trial challenged that case, on the basis that as agent banks under the facility, Citi and Nordea could not also have been advising Euronav. The facility documentation and regulatory filings made clear that they were the lending banks’ facility agents, and Euronav did not pay or make provision for any fees to Citi or Nordea. Conversely, the Press release of 21 December 2017 announcing the merger, and the US regulatory filings, referred to RMK (and no-one else) as Euronav’s financial adviser.

Whether Citi or Nordea advised Euronav, strictly speaking, is debatable, though as Euronav points out, clause 30.20(c) of the Facility Agreement specifically permitted the Facility Agent to provide advice or other services to the Borrower. Mr de Stoop in oral evidence that:-

“Every single transaction that I’ve done in my career required an agent and the agent was always an advisers, in terms of structuring, in terms of appetite of banks in the market; certainly when it’s a syndicate i.e. a large group of banks you cannot know, on your own, who is active in the market, who has appetite for what size of deals, where they are in their current loan book. Et cetera, et cetera. So it’s two different roles but they are not in conflict with one another. If they are running into conflict then they declare it and we deal with it appropriately.” (Day 5/92)

Mr de Stoop added that Citi’s advisory role was the only reason why they received a higher fee as agent than Nordea did.

The correspondence shows that Citi liaised closely with Euronav about the details of the transaction in order to facilitate the proposed rollover. At the same time, Euronav on numerous occasions during the rollover discussions sought financial information relating to the merger from RMK, which it provided, largely related to the model.

Thus on 19 January 2018, Mr de Stoop wrote to RMK requesting a presentation to illustrate how the merged entity would look, to present to the commercial banks and to KEXIM/K-Sure. Mr de Stoop asked RMK to put together “ a few slides using the material that you have”, and suggested what information they should contain. Mr Keros of RMK provided a first draft the following day. Mr de Stoop on 22 January 2018 requested the latest ratio calculations, for Euronav’s auditors, KPMG, which RMK provided the same day. (This may relate not to the rollover discussions but to KPMG’s anticipated role in providing a fairness assessment.) RMK sent the latest version of the model to Euronav on 30 January 2018 at the request of Mr Melis of Euronav.

On 1 February 2018, Mr de Stoop requested answers from RMK to three specific questions raised by KEXIM regarding merger expenses, the Gener8 discount to NAV, and break-even rates for vessels. On 2 February 2018, Mr Keros provided a corrected version of the presentation. Mr de Stoop asked RMK to re-run the model “for the years 2019-2020 us in street consensus”, as Nordea and CITI felt the projections should be more conservative, which Mr Keros provided the next day.

On 8 February 2018, RMK provided four transaction scenarios requested by Mr de Stoop. On the same day, Mr de Stoop forwarded some questions from KEXIM, noting that “we have had too many errors or misunderstandings with the material provided to the banks in general” and proposing a call to make sure everybody was working with the same assumptions “which will need to be listed and made very clear for every iteration of the model we produce”. Various queries from KEXIM regarding the merger were addressed on 8 and 13 February 2018.

On 14 February 2018, Mr de Stoop asked RMK to develop a standalone model that “KEXIM would be able to use and play with but something that would not trigger more questions than answers” and “a 5-year cash flow sensitivity model similar to the one attached to this email with the following scenarios [4 scenarios identified below]”. This followed a complaint from KEXIM that they needed adjustable raw data for their own use, leading Mr de Stoop to comment to RMK on 13 February that “we are far from being out of the woods … I wonder at this point if we shouldn’t give them the model …”. RMK now says this shows that Euronav was “out of its depth” and relied on RMK for getting it “out of the woods”. In my view, the correspondence merely shows that, unsurprisingly, the lending banks needed the data in the model, and preferred also to have the ability to manipulate it themselves, in order to assess the implications of the proposed rollover.

Mr Keros provided a “draft KEXIM model” “which includes cash flow output and breakeven” (information not in the model) on 16 February 2018, and an updated version on 18 February 2018. This was largely an additional tab containing a simplified version of the existing model, with the addition of a cashflow tab and setting out alternative charter rate scenarios (assumptions) in the ‘Spot Rates’ tab. Mr Kirk said in his oral evidence that it took Mr Keros two long days to produce, and I see no reason to doubt that. Mr de Stoop sent the simplified model to KEXIM on the same day. On 19 February 2018, Mr de Stoop wrote to RMK saying, “As anticipated [KEXIM] want a full analysis (P&L and BS) on their lousy scenario in addition to the model. Could you run this scenario for me so that we can provide it to them.” Mr Keros provided this the same day. Mr de Stoop asked for the model output applying a further scenario on 22 February 2018, which Mr Keros provided that day.

RMK was asked by Mr de Stoop to address further information requests and queries from KEXIM on 5, 6 and 9 March 2018, each of which RMK did on the same day. RMK dealt with further queries on 16 March 2018.

During the same period (January to March 2018), it was necessary in view of the merger for Euronav to prepare for filing a Form F4, a registration statement used to register securities in connection with inter alia business combinations, with the US Securities and Exchange Commission. The form was completed with contributions from several different parties including, Euronav, SewKis, and Euronav’s Belgian counsel, Argo. RMK was also involved in some aspects. In December 2017/January 2018 SewKis asked the Euronav, RMK and Argo teams to review a working draft of the form, including the section on the “background of the merger” (which RMK reviewed). On 8 January 2018, pursuant to Euronav’s request, RMK provided Euronav with an overview of Gener8’s restricted stock units and stock options. RMK was asked to review the “background of the merger” section of the draft F-4 to ensure it accorded with RMK’s record of events from Euronav’s perspective, and to input certain financial information where required. On 12 February 2018, at the request of Mr Melis of Euronav, RMK reviewed the input into the F-4 Registration Statement provided by Gener8. RMK on 14 March 2018 reviewed a draft response to the SEC in relation to information required for the filing, and on 20 March liaised with UBS to establish the source of NAV analysis in the F-4 filing and regarding the potential disclosure of Euronav’s valuation breakdown. On 22 March 2018, RMK calculated the average age of the combined fleet on 28 March 2018, and provided draft comments for the F-4 Form on 16 April 2018. The “Background of the Merger” section of the Form F-4 as filed referred to RMK’s role, having been appointed as Euronav’s independent financial adviser “because of RMK’s qualifications, reputation and experience in the valuation of businesses in connection with mergers and acquisitions generally and in the shipping sector specifically”. The same account of the background to the merger appeared in Gener8’s Schedule 14A information, a statement required to be filed by a publicly listed acquired company, and which was signed by Mr Rodgers and Mr de Stoop among others.

Mr Kirk gave evidence in his witness statement and in cross-examination that, in a telephone conversation on or around 1 February 2018, he raised the issue of fees with Mr Rodgers and Mr de Stoop again. Mr Kirk says that he was advised that he should wait until the rollover of the KEXIM and Sinosure debts was completed, as no deal was going to be signed until that had been dealt with. Mr Kirk had a recollection of Mr de Stoop saying words to the effect of: “don’t worry, we’ll take care of you when it comes to fees.”  He felt it acceptable to take Euronav at their word, given that on the Maersk Tankers deal they had paid a fee commensurate with the work done.

Mr Moore similarly recalled Mr Rodgers saying, in February or March 2018, something along the lines of “do not worry, we will look after you”, and remembered sending a text message to Mr Kirk a very short time afterwards to let him know. In cross-examination Mr Moore said:-

“A. I can absolutely say he did say that to me. And I would think a conversation like this, which is so important, regarding fees, I will remember very -- very clearly. I cannot speak for Mr Rodgers. He is the CEO of Euronav, he would have been looking at this transaction, so maybe it was less meaningful to him. But for ourselves as a company, and with the fees in the business that we do, I very clearly remember it.”  (Day 3/136)

This alleged conversation was not specifically put to Mr Rodgers or Mr de Stoop, though, as summarised earlier, the general point was put to them that they gave assurances to the effect that RMK would be taken care of or looked after. It seems to me very plausible that a similar assurance was given at this stage of the process. However, for the reasons I give earlier, it would not advance matters. Indeed, if the subject of fees was raised yet again in February 2018, that might tend to undermine the suggestion that there was a longstanding joint understanding of the kind RMK alleges. In any event, a further assurance to the effect that RMK would be looked after or taken care of was consistent with an intention to pay a discretionary bonus, by reason of the contractual work having been done well and/or having taken more time and effort that was originally expected. It did not evidence or create a joint understanding that RMK was working outside the scope of the Advisory Agreement or that it would be entitled to further payment.

On 12 March 2018, Mr de Stoop sent an email to Mr Rodgers about deal fees saying:-

“Please find my input.

FYI on the banker's fee we had printed 10m for nego purpose knowing that we were only at 2.25 with RMK. I believe we will end up giving them double that but this is still to be discussed of course. I have nevertheless taken this assumption for the spreadsheet.

Egied should be able to give us an accurate picture on the legal costs from both sides.

In the meantime for our side (Euronav bank/legal/Audit) I have taken the following:

2.25

additional to 2.25 for RMK

2.5

total Sewkis?

1 total Argo [Euronav’s Belgian lawyers]

500k for KPMG

So still well below the 10m” 

The references to US$ 2.25 million in relation to RMK were incorrect, as Mr de Stoop and Mr Rodgers agreed, as the total fees payable under the Advisory Agreement were US$ 2 million rather than US$ 2.25 million.

RMK submits that this message shows that Euronav realised that RMK had done substantial work outside the Advisory Agreement and that Euronav was obliged to pay an additional fee. I disagree. This communication too is consistent with Euronav’s intention to pay a discretionary bonus, in an amount yet to be discussed.

It was suggested to Mr de Stoop in cross-examination that the message showed that he would not have regarded US$ 4.5 million as an over-payment to RMK. Mr de Stoop responded that, by suggesting to Mr Rodgers that Euronav would end up paying RMK double the contractual amount, he was trying to provoke Mr Rodgers. Mr de Stoop said he felt that Mr Rodgers had overpaid RMK on previous transactions, and that the message he was seeking to convey was “knowing you, you will agree to that”; Mr de Stoop said that, when Mr Rodger reacted by telephoning Mr de Stoop, he asked why Mr de Stoop had made that comment, to which Mr de Stoop replied “that’s exactly what happened last time around”. None of that was set out in Mr de Stoop’s witness statements, and it is possible that it involved a degree of reconstruction (albeit there is no other particular reason to think that it did). However, it was not directly suggested to Mr de Stoop that this message showed that Euronav regarded RMK as entitled to such a payment, and he made clear that that was not his view. In response to the suggestion that this was an example of the constant reassurances Euronav gave RMK, Mr de Stoop said this:-

“A. I don't believe that for a second. I think that [Mr Kirk is] a very, very clever person. He can read a contract and he was perfectly seeing that the contract was from the start to the end, the contract is crystal clear about that. He could have not stopped working. It has nothing to do with his belief. He didn't even bring that possibility once.

Q. Again, he had no need to raise it as a possibility in circumstances where he was receiving constant reassurance from Euronav that you would look after him and that you would recognise his endeavour. That's the true position, isn't it?

A. No, it's not -- it's certainly not my position. I don't that it's Paddy's position. The fact that he was reassured is entirely down to him. And the only thing that we can say is that we are generous people, we have always paid bonuses when we thought that the job had been done in an excellent way, which continues to be the case. We are very, very happy with what RMK did for us in this transaction. And that what -- that was within the boundaries of the contract and when we are happy we were in tradition of paying bonus.” (Day 6/23-24)

On 28 March 2018, Mr de Stoop informed Mr Kirk that KPMG needed to perform a limited audit on the fair value assessment of the deal and “therefore need to understand how we came to the ratio”. Mr de Stoop needed an Excel file with the ratio calculation and the basis for each line, which RMK provided on the same day. RMK continued to liaise with Euronav about this, including on 21 April 2018 when Mr Kirk reverted on missing items which KPMG had queried. Mr Kirk’s email of 21 April said that, after reviewing the queries, “it seems that all of this is pretty straightforward with a couple of queries”.

On 24 April 2018, Mr Kirk followed up on one of the queries he had raised. On 25 April 2018, Mr de Stoop replied indicating that “the idea is to re-do the exercise completely (except for TC portfolio adjustment, FSO valuation and FF)”, so that Mr Kirk needed to update the balance sheet elements (including working capital, cash and debt), the value of the vessels (as to which Mr de Stoop attached Clarksons’ and Braemar’s valuations) and also to take the vessel sales that had been sold into account. The updates were provided on 8-9 May 2018.

The due diligence process continued, with RMK liaising with UBS on this on 10 April 2018.

On 13 June 2018 the merger between Euronav and Gener8 was concluded and publicly announced by a Press release, following approval by the shareholders of Gener8, following a Special Meeting of its Shareholders on 11 June 2018.

The same day, Mr Kirk and Mr Moore exchanged WhatsApp messages. Mr Moore wrote:

“I think we should be asking for $10m. That’s a 35% discount to market (let’s call it the Euronav discount), but fair and reasonable.”

Mr Kirk replied: “Agreed. That’s the right number.” 

RMK submits that this exchange reflected its continued belief that a market-based fee was appropriate and that Euronav had not rejected this. That may be so, but the messages do not evidence any joint understanding with Euronav, and are not inconsistent with Euronav’s position that any additional payment would be discretionary.

At a Marine Money Conference in New York on or about 18 June 2018, Mr Kirk moderated a panel featuring Mr Rodgers. During the presentation, a slide was shown indicating that Euronav’s deal fees were $3 million, compared to Gener8’s $18 million. Mr Kirk and Mr Moore say they were alarmed by this, interpreting it as a public repudiation of RMK’s entitlement to what they regarded as a market-based fee. This event was followed by the email and text exchange referred to in §§ 110-111 above.

The following evening, 19 June 2018, Mr de Stoop sent an email to Mr Kirk on which RMK relied in its written closing. Mr de Stoop said Euronav and RMK were far apart, and that he had spoken to some contacts in the industry about M&A fees, leading him to conclude that UBS’s fee “cannot be taken as a reference whatsoever”. He continued:-

“Craig Fuehrer told me that he (DB) would do it for $5m but when he quoted that included a fairness opinion. That was some months ago and he doesn’t know what we are paying RMK. I don’t need to tell you that DB is a lender, has an analyst covering the stock and has demonstrated that they can be very helpful (reason why we chose them as lead le` in our IPO). If DB is there at $5m and you said that you would agree RMK (like Pareto) works at a discount (40% in our conversation yesterday) to the big banks (because you are not a lender, you don’t have an analyst, you cannot be the agent, you cannot produce a US GAAP /IFRS model for our European prospectus,…) then I believe there is a chance we can meet each other on the fee side. We agreed a contract and we are happy to think about an additional DISCRETIONARY bonus on top of that. That is where we are coming from and in our cross referencing fees we have come up with data points which ratify our view further …not weaken it.

The contract reads as follows:

…

So all the work that you have done is well within the scope of the contract We have enjoyed working together on three different successful deals and look forward to again in the future but if this is not settled amicably and quickly that is in doubt. Mike, we have been very happy with the service you have provided but your obsession with the UBS fee is distorting your view on what is fair…. You are putting us in a very awkward position because your expectation are so far away from the real world that there is no incentive for EURONAV to move from the contract as whatever we were thinking of adding to the contractual fee will still be too far away from a satisfactory position for you. If you break the relationship because of your unreasonable position, I don’t think we should pay for the divorce. Last but not least, the presentation will be changed before it goes on the website and as you know it was not available on paper…so I don’t believe any damage has been done – let’s not discuss “respect” in that context…this is insulting… ”

RMK submits that Mr de Stoop was, in this email, tacitly accepting that RMK had performed “the M&A buyside advisory role”. Mr de Stoop was not taken to this document, so did not have an opportunity to comment on it. However, what does emerge clearly from it is that Mr de Stoop considered the services RMK had provided (a) to be less extensive than various putative comparators and (b) to be within the scope of the Advisory Agreement. Mr Kirk’s reply included this:-

“We are not whining about this after the fact. I tried to have this conversation with you 5 or 6 times since I first brought the subject of the fee not being sufficient in February 2017. In retrospect, I have should have nailed down a number with you before moving forward. However, each Ime I was reassured by you as was Richard by Paddy on separate occasions. I didn’t think we were being naïve, because RMK was paid fairly (albeit with a Euronav discount) on the Maersk transaction. The GNRT deal is larger in ships and total value was much more complex and it took genuinely 50x as long, so I assumed that was the minimum fee we could be looking at.”

Again, this exchange provides no support for their having been any joint understanding during the transaction that RMK was doing working beyond the scope of the Advisory Agreement for which it would be entitled to additional payment.

The next day, 20 June 2018, there was an internal exchange of emails between Mr Rodgers and Mr de Stoop which RMK quotes in its written closing. Mr Rodgers wrote:-

“'Irreconcilable' is a strange word for a broker to use.

Our original deal was not on a success fee was it?

If not then that is a huge difference.

They have no legal position as we negotiated the agreement.

They are asking for an ex gratia payment.

Richard, broker that he is, was trying to state that he had assurance from me that we would pay up. He did not.

I personally think a payment of 1musd as a bonus is fair and significant. It is tiring but keep up the good work.”

to which Mr de Stoop replied:-

“Noted on the word irreconcilable CD

No it was not a % but every stage payment (we already paid $1m) was linked to a successful step.

Mike was saying that we deliberately pushed the discussion to after the deal in order to pay less.

It is sad to see that their feet is no longer touching the ground !

He sent a text to say that we should speak in a couple of hours. Let's see but in any event that will be the last discussion on the topic.”

RMK notes that this email chain is the only one in Euronav’s disclosure bearing the banner “This message has been archived”, and suggested to Mr de Stoop that it had been specifically preserved to record the ‘line’ that he and Mr Rodgers were going to take, namely that any payment would be ex gratia or discretionary. Mr de Stoop did not accept that, noting that there was an automatic system for archiving after three years (and he would be surprised if there were not more messages with this banner). I see no basis for RMK’s suggestion, not least in circumstances where Mr de Stoop’s email of 19 June 2018 quoted above itself included the statement, overtly to RMK, that any additional payment would be discretionary bonus. The suggestion is an attempt to create bricks without straw.

RMK also, in its written closing invited the inference that Euronav’s disclosure was defective, there being messages that had not been disclosed because they did not support Euronav’s case. RMK noted that Euronav’s solicitors on 13 November 2024 stated that its witnesses no longer recalled and/or no longer held copies of messages some exchanged eight years previously, and no longer held positions at Euronav; and that Euronav had no further messages to disclose. In his second witness statement, in December 2024, Mr Rodgers said he no longer had access to texts sent around the time of June 2018. In April 2025, Euronav’s solicitors said they were informed that:-

“Mr Paddy Rodgers was not inclined to use instant messages (such as WhatsApp/SMS messages) to discuss business matters such as the Transaction and it is of this reason no WhatsApp/SMS messages are available to be disclosed.

Nevertheless, and despite the number of years that have passed since the Transaction, Mr de Stoop was able to retrieve the WhatsApp exchanges with Mr Rodgers of which there are very little. We have reviewed these and can confirm that none of them are relevant to the Transaction and/or this litigation.”

RMK suggest that this shows an unsatisfactory vacillation between messages being lost due to lapse of time and no relevant messages having been exchanged at all. These matters were not explored with Mr de Stoop or Mr Rodgers in cross-examination, and in any event I do not consider the suggested inference to be justified. There is no inconsistency between (a) Mr Rodgers’ usual modus operandi being not to use WhatsApp or SMS for business matters, (b) Mr Rodgers no longer having access to any such messages from 2018, (c) the witnesses no longer being able to recall such messages and (d) few or no such messages being relevant. The serious allegation that, in effect, relevant messages have been suppressed was not properly advanced at trial and had no proper basis so far as I can see.

On 25 June 2018, Mr Moore met Mr Rodgers at Euronav’s London office. Mr Rodgers offered RMK a discretionary bonus of $1 million. Mr Moore’s evidence was that Mr Rodgers said: “We will pay you $1 million for your work on the deal.”  When Mr Moore objected that this was not consistent with prior assurances, Mr Rodgers allegedly responded: “I don’t care what I said, in fact I am going to give you until 5pm to accept this or the bonus of $1m is off the table.” Mr Moore says he replied: “I cannot believe you have gone back on your word to me”, to which Mr Rodgers is said to have responded:“I do not care, this meeting is now over.” Mr Moore declined the offer, believing it to be inadequate.

Mr Rodgers in his second witness statement said he could not recall the specific words alleged, but that he believed he was a man of his word and that the bonus he offered was more than generous given the work RMK had carried out. In cross-examination, Mr Rodger explained that he felt frustrated during this encounter, and that Mr Moore had been “verballing him up in a way that suggests that I had simply gone back on an agreed promise, which is not the case”. He said he did not agree that Mr Moore’s account was accurate, though he was willing accept it to the following extent:-

“Q: … In particular the first part of what Mr Moore recalls where he says that this is not what he had regarded as being looked after, and you responded, "I don't care what I said. In fact I'm going to give you until 5 pm to accept this or the bonus is off the table."

If that is something that you would not have said, certainly didn't say, then you would've said that in your witness statement, wouldn't you?

A. The distinction I'm trying to draw, my Lord, I may -- I may have used language like that but this was not the purpose of it, it's simply to say this is not what we're here for. This is a -- this is a discussion about how we reach the payment of our discretionary bonus and making sure that it lands well.” (Day 5/23/14-24/3)

Pressed on the evidence in his second witness statement about having made the position abundantly clear to RMK, Mr Rodgers gave this evidence:-

“Q. … You never made it abundantly clear that there was no room for argument about the scope of the work that Mr Kirk was doing, had you?

A. Well I think it is clear isn't it? From the agreement that we've signed.

Q. And if we look at (iii), you have just agreed that you thought it was axiomatic and implicit that any payment, additional payment, would be a discretionary bonus but you hadn't actually said that to RMK, had you?

A. I think my position is that it was -- it was apparent from the fact that we had gone through this long negotiation on the contract.”

RMK argues that the offer of a US$ 1 million bonus was itself inconsistent with Euronav’s position that RMK had no entitlement to further payment. I do not agree. In my view, the exchanges between Mr Rodger and Mr Moore on 25 June 2018, and the bonus offer made, did not reflect or evidence any prior promise or joint understanding about an entitlement to additional payment for extra-contractual work, and were consistent with Euronav having giving indications along the way that it envisaged paying a discretionary bonus, to be the subject of discussion at the end of the transaction.

APPLICABLE PRINCIPLES

The starting point is the general principles of contractual interpretation, which were summarised in Arnold v Britton [2015] UKSC 36; [2015] AC 1619:

“When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101, para 14. And it does so by focussing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions.” (§ 15)

“… the reliance placed in some cases on commercial common sense and surrounding circumstances (eg in Chartbrook, paras 16-26) should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. And, again save perhaps in a very unusual case, the parties must have been specifically focussing on the issue covered by the provision when agreeing the wording of that provision.” (§ 17)

As to the admissibility of pre-contractual negotiations, Leggatt LJ in Merthyr (South Wales) Ltd (FKA Blackstone (South Wales) Ltd) v Merthyr Tydfil County Borough Council [2019] EWCA Civ 526 said:

In Prenn v Simmonds, cited in the above passage, Lord Wilberforce had among other things provided an illuminating explanation of why evidence of pre-contractual negotiations about particular terms of the contract is generally inadmissible:-

“There were prolonged negotiations between solicitors, with exchanges of draft clauses, ultimately emerging in clause 2 of the agreement. The reason for not admitting evidence of these exchanges is not a technical one or even mainly one of convenience, (though the attempt to admit it did greatly prolong the case and add to its expense). It is simply that such evidence is unhelpful. By the nature of things, where negotiations are difficult, the parties' positions, with each passing letter, are changing and until the final agreement, though converging, still divergent. It is only the final document which records a consensus. If the previous documents use different expressions, how does construction of those expressions, itself a doubtful process, help on the construction of the contractual words? If the same expressions are used, nothing is gained by looking back: indeed, something may be lost since the relevant surrounding circumstances may be different. And at this stage there is no consensus of the parties to appeal to. It may be said that previous documents may be looked at to explain the aims of the parties. In a limited sense this is true: the commercial, or business object, of the transaction, objectively ascertained, may be a surrounding fact. Cardozo J. thought so in the Utica Bank case [Utica City National Bank v. Gunn (1918) 118 N.E. 607, NY Court of Appeals]. And if it can be shown that one interpretation completely frustrates that object, to the extent of rendering the contract futile, that may be a strong argument for an alternative interpretation, if that can reasonably be found. But beyond that it may be difficult to go: it may be a matter of degree, or of judgment, how far one interpretation, or another, gives effect to a common intention: the parties, indeed, may be pursuing that intention with differing emphasis, and hoping to achieve it to an extent which may differ, and in different ways. The words used may, and often do, represent a formula which means different things to each side, yet may be accepted because that is the only way to get “agreement” and in the hope that disputes will not arise. The only course then can be to try to ascertain the “natural” meaning. Far more, and indeed totally, dangerous is it to admit evidence of one party's objective — even if this is known to the other party. However strongly pursued this may be, the other party may only be willing to give it partial recognition, and in a world of give and take, men often have to be satisfied with less than they want. So, again, it would be a matter of speculation how far the common intention was that the particular objective should be realised. …

In my opinion, then, evidence of negotiations, or of the parties' intentions, and a fortiori of [one party’s] intentions, ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the “genesis” and objectively the “aim” of the transaction.” ([1971] 1 WLR 1381, 1384-1385)

The recitals to a written contract may be taken into account as an aid to interpretation, at least if they are capable of being read consistently with the operative parts of the contract (see, e.g., Lewison, The Interpretation of Contracts, 8^th ed., § 10.37 citing Attorney General v River Doree Holdings Ltd [2017] UKPC 39). There is authority indicating that if the operative parts of the document are clear, then the recitals will not control or cut them down (ibid., §§ 10.41 ff). However, the position is often more nuanced than that, and Lewison points out that “[m]odern methods of interpretation, in which background plays a far larger part than used to be the case, may have tempered the apparent rigidity of older statements of principle requiring ambiguity before recourse could be had to recitals” (§ 10.47, citing Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407 at [380], Russell v Stone (t/a PSP Consultants) [2017] EWHC 1555 (TCC), [2017] P.N.L.R. 34, and Restaurant Brands Ltd v QSR Ltd. [2021] NZCA 680).

The reversal of unjust enrichment is premised on the defendant having received a benefit from the claimant such that the claimant has incurred a loss as a result of the provision of the benefit: Investment Trust Companies v Revenue and Customs Commissioners [2017] UKSC 29, [2018] AC 275 at [43] per Lord Reed.

It is well-established that four questions arise in respect of a claim for unjust enrichment (Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221, 227):-

Lord Reed in Investment Trust Companies said:-

“if [the four questions set out above] are not separately considered and answered, there is a risk that courts will resort to an unstructured approach driven by perceptions of fairness, with consequent uncertainty and unpredictability. At the same time, the questions are not themselves legal tests, but are signposts towards areas of inquiry involving a number of distinct legal requirements. In particular, the words “at the expense of” do not express a legal test; and a test cannot be derived by exegesis of those words, as if they were the words of a statute” ([41])

An unjust enrichment claim cannot properly be based on a wide-ranging and open-ended assessment of fairness or justice in the round. Rather, it requires the claimant to make out an established category of ‘unjust factor’ in order to trigger the claim: Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149 at [59]-[64]; Investment Trust Companies at [39].

Examples of unjust factors recognised by English law include: (a) mistake, (b) duress, (c) undue influence, (d) failure of basis, (e) necessity and (f) legal compulsion. These unjust factors are recognised because they establish that the claimant did not intend the defendant to receive a benefit in the circumstances, either because the claimant never had an intent to benefit the defendant in those circumstances or the intent was vitiated or qualified in some way: see Dargamo at [58].

The Supreme Court’s decision in Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, [2019] AC 119 upheld contractual provisions denying validity to variations or changes that had not been agreed in accordance with a contractually mandated process. In so doing, the Court acknowledged the importance, as a matter of English law, of enforcing and giving effect to the parties’ autonomy to bind themselves (see [10]-[11]). Lord Sumption explained such clauses’ purpose thus: “in circumstances where oral discussion can easily give rise to misunderstandings and crossed purposes, it avoids disputes not just about whether a variation was intended but also its exact terms” (§ [12]).

A subsisting contract between the parties may leave no room for an unjust enrichment claim. This may be the case for one of two reasons.

First, such a claim cannot be brought inconsistently with a valid and subsisting legal obligation of the claimant to confer the benefit on the defendant. As Lord Leggatt (dissenting in the result) observed in Barton v Morris [2023] UKSC 3, [2023] AC 684, “a party cannot be said to have been unjustly enriched by the receipt of a benefit to which he or she was legally entitled. Put another way, the existence of a contractual or other legal obligation to confer the benefit necessarily means that the resulting enrichment at the claimant’s expense is not unjust” ([190]).

Secondly, the scheme of the contract as a whole may be inconsistent with an unjust enrichment claim:-

“… there is also another broader reason why the existence of a contract precludes a claim based on the law of unjust enrichment. This is that there already exists a system of law for determining what rights and remedies contracting parties have in relation to the subject matter of their contract. It is called the law of contract. In relation to the subject matter of the contract, the law of contract determines, and governs the consequences of, not only the existence but also the absence of an obligation on one contracting party to confer a benefit on the other. To redistribute the allocation of benefits and losses provided for by the law of contract by applying another set of legal principles would undercut this regime” ([191] per Lord Leggatt).

Cases falling within this category include Howard Houlder and Partners Ltd v Manx Isles Steamship Co Ltd [1923] 1 KB 110 and The Trident Beauty [1994] 1 WLR 161.

Different considerations may apply where work is done outside the scope of the contract. Lord Leggatt in Barton said:-

“As Lord Goff noted in The Trident Beauty, different considerations may arise where the contract is discharged or is shown never to have been binding. So too where work is done under an anticipated contract which never materialises. Even where there is a valid and subsisting contract, questions may arise about the scope of the applicable contractual regime as, for example, where a party performs or claims to have performed services additional to or different from those covered by the contract. In such cases the law of unjust enrichment may have a part to play.” ([193])

I do not, however, accept RMK’s submission that an unjust enrichment claim will always be available, absent an express exclusion in the contract, if additional services are provided. In my view, it is always necessary to consider whether the claim is consistent with the contractual regime to which the parties have committed themselves. The question is the parties have expressly excluded or limited remedies in unjust enrichment, or whether “the terms of their contract … lead to the conclusion that a remedy in unjust enrichment has been displaced” (Goff & Jones § 3.11). As Lord Burrows put it in Barton:-

“… Clearly restitution for unjust enrichment may be contractually excluded by the parties (whether by an express exclusion clause or, more generally, by inconsistent contractual terms): see, e g, Pan Ocean Shipping Co Ltd v Creditcorp Ltd (The Trident Beauty) [1994] 1WLR 161, 164; MacDonald Dickens & Macklin v Costello [2012] QB 244, paras 23—35; Go› & Jones, paras 3-28—3-38. The parties’ own allocation of risk can override the law of unjust enrichment that would be imposed if there were no such exclusion. If the unilateral contract was an “if, but only if” contract in the strong sense, restitution for unjust enrichment would have been excluded.” (§ 237)

Equally, I do not accept that restitution is excluded only where there is an ‘if, but only if’ contract (nor that that is what Lord Burrows implied). What matters is the effect of the contract considered as a whole.

In Barton, the parties had agreed that a claimant would be paid £1.2m in the event that a particular property was sold for £6.5 million to a buyer introduced to the defendant seller by the claimant. The property was eventually sold to a buyer introduced by the claimant for £6 million, with the result that on the express terms of the contract, the claimant was not entitled to any payment. Further, the Supreme Court rejected the argument that a term should be implied to the effect that the claimant would be paid a reasonable fee if the defendant sold the property for less than £6.5 million.

The claimant alternatively sought quantum meruit on the basis of unjust enrichment. In rejecting that claim, Lady Rose (with whom Lords Briggs and Stephens agreed) considered previously authorities, including MacDonald Dickens & Macklin v Costello [2012] QB 244, where Etherton LJ (with whom the other members of the Court of Appeal agreed) said:-

“The general rule should be to uphold contractual arrangements by which parties have defined and allocated and, to that extent, restricted their mutual obligations, and, in so doing, have similarly allocated and circumscribed the consequences of non-performance. That general rule reflects a sound legal policy which acknowledges the parties’ autonomy to configure the legal relations between them and provides certainty, and so limits disputes and litigation. The following cases support its application to the present case.” (§ 23)

On the facts, the majority in Barton concluded that the effect of the contract was to exclude such a claim. Lady Rose rejected the Court of Appeal’s conclusion that the contract did not exclude a claim for unjust enrichment because it was silent as to what would happen when the property was sold for less than £6 million:-

“I disagree with that analysis for reasons which mirror the reasons for rejecting the implication of a contractual term. When parties stipulate in their contract the circumstances that must occur in order to impose a legal obligation on one party to pay, they necessarily exclude any obligation to pay in the absence of those circumstances; both any obligation to pay under the contract and any obligation to pay to avoid an enrichment they have received from the counterparty from being unjust. The “silence” of the contract as to what obligations arise on the happening of the particular event means that no obligations arise … This excludes not only an implied contractual term but a claim in unjust enrichment.” ([96])

“McCardie J [in Howard Houlder] cited a number of Court of Appeal authorities supporting his analysis that a plaintiff cannot claim on a quantum meruit where they have chosen to tie themselves down by the express terms of an agreement. There, as in the present case, the contract covers the ground so far as concerns when Mr Barton is entitled to receive a commission for the introduction of the purchaser and there is no room for an unjust enrichment claim.” ([101])

“I do not consider that there is to be found in this court’s judgments on this appeal any fundamental disagreement about the underlying legal principles, although they may be given different levels of emphasis. The real difference between us concerns whether the express term, that Mr Barton was to receive £1.2m if the property was sold for £6.5m to a purchaser introduced by him, was a complete statement of the circumstances in which he was promised some reward under the agreement, or only a partial statement, leaving it to be implied that he would also receive some unspecified reward if the property was sold to such a purchaser, but for less than £6.5m. If it was a complete statement, then a lesser reward for a sale below £6.5m could not be implied, because it would be inconsistent with the condition for the reward expressly agreed. Nor could there be a remedy in unjust enrichment, because a nil reward for such a sale was what the parties had agreed. The enrichment consisting of the benefit to Foxpace of a sale to a purchaser introduced by Mr Barton, for no reward to him, would not be unjust, because it was an outcome provided for by the agreement. Unjust enrichment mends no one’s bargain.” ([107])

Lords Leggatt and Burrows dissented on the question of whether the contract in question provided a complete statement of the circumstances in which the claimant was to be paid. Lord Leggatt considered that the claimant was entitled to recover pursuant to the ordinary term implied by law into a contract for services to pay a reasonable sum where no sum is fixed by the contract (§ 194). Lord Burrows was of the same view, and also would have concluded that an unjust enrichment claim was available in the alternative, the ‘unjust factor’ being failure of basis.

Lady Rose in Barton quoted Carr LJ’s summary of this concept in Dargamo:-

“The core concept of 'failure of basis' is that a benefit has been conferred on a joint understanding that the recipient's right to retain it is conditional. If the condition is not fulfilled, the recipient must return the benefit (see Goff & Jones [sc. Goff & Jones on the Law of Restitution, 7th ed (2007)] at 12-01). Whilst failure of basis ranks alongside the unjust factors of mistake, duress and undue influence as a factor negativing consent, it differs in that it is concerned with qualification of consent, as opposed to impaired or vitiated consent (see Burrows, The Law of Restitution (3rd edn, 2011)).” (Barton § [78] quoting Dargamo § [79]).

Accordingly, the basis of the transfer that is said to have failed must be one that was jointly understood or shared as such by both parties. If only one party has a particular basis in mind, and that basis fails, no claim in unjust enrichment can arise: Goff & Jones at §13-02. 316. The basis must be ascertained objectively, with the parties’ subjective thoughts being irrelevant: see Goff & Jones at §13-02.

In H&P Advisory Ltd v Barrick Gold (Holdings) Ltd (formerly Randgold Resources Ltd)[2025] EWHC 562 (Ch) (“Barrick Gold”), a boutique investment bank brought a quantum meruit claim on the basis of unjust enrichment following the merger of Randgold Resources Ltd and Barrick Gold Corporation. The claimant was awarded US$2 million as it had communicated the expectation of remuneration at a meeting with the defendant, but the defendant had remained silent ([262]). Mr Simon Gleeson, sitting as a Deputy High Court Judge, cited with approval a passage from Virgo, The Principles of the Law of Restitution (4th edn, 2024) including the following:-

“The basis is to be determined objectively by reference to whether a reasonable person in the position of the defendant would have understood that receipt of the enrichment was conditional, rather than by reference to the subjective motives of the claimant...” ([247])

However, in an appropriate case, it may be legitimate for the court to look beyond the terms of the contract for a wider understanding of the context of an unjust enrichment claim. Thus, the Court of Appeal in Dargamo said:-

“132.

I would accept as a matter of principle that in an appropriate case, it may be legitimate for a court to look beyond the terms of the contract for a wider understanding in the context of an unjust enrichment claim, even though there is a valid and subsisting contract. (There may of course be no contract, as in the deposit cases). As developed by Frederick Wilmot-Smith in Replacing Risk-Taking Reasoning 127 LQR (October) 2011, 610 – 730, the underlying rationale for a claim in unjust enrichment differs from that of a contractual claim, and different policy considerations will arise. For example, in unjust enrichment, the practical policy reasons for excluding previous negotiations in the interpretative exercise do not arise. It may be that the “best way forward” is to “build on those principles developed to interpret contracts, bearing in mind the different context of a claim in unjust enrichment” (at 620-621). Frederick Wilmot-Smith suggests that “the agreements and understandings of the parties are crucial elements in the exercise of construction. They help to establish whether the enrichment was conditional and the conditions attached to the transfer” (at 623).

133.

However, where the basis of the consideration is expressly and unconditionally spelt out on the face of a valid and subsisting contract, as here, there is no proper scope for inquiring into an alternative basis that is plainly contrary to the express basis freely agreed between the parties. It is not an inquiry that was carried out in Roxborough [Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; [2001] 208 CLR 516] or Barnes [Barnes v Eastenders Cash & Carry plc [2014] UKSC 26] where the basis that failed was one not at odds with (and indeed in the case of Roxborough expressly reflected in) the relevant contractual provisions. ”

The shared basis of the transfer of the benefit need not be express; it may be implied form the circumstances of features and context of the transfer: see Goff & Jones at §13-08.

The failed basis may be that the services will be paid for: see Goff & Jones § 16-07 quoted in Barrick Gold at [249]:

“[i]f the services are of a kind which would normally be provided free of charge, that suggests that the transfer is gratuitous; if, conversely, the services are of a kind not normally given free of charge, that suggests that they have been provided for on the basis that they are to be paid for. What is the norm in a particular industry may need to be shown by expert evidence”

As a possible alternative to failure of basis, RMK relies (if necessary) on what Goff and Jones and some of the cases referred to as the principle of “free acceptance”. Goff and Jones § 17-03 states:-

“[A defendant] will be held to have benefited from the services rendered if he, as a reasonable man, should have known that the claimant who rendered the services expected to be paid for them, and yet did not take a reasonable opportunity open to him to reject the proffered services. Moreover, in such a case, he cannot deny that he has been unjustly enriched.”

albeit the authors in § 17-05 go on to cite criticisms of the (suggested) principle, including the critique by Andrew Burrows in “Free Acceptance and the Law of Restitution” (1988) 104 L.Q.R. 576 more recently reflected in Lord Burrows’ dissenting judgment in Barton.

RMK relies on a series of cases concerned with benefits conferred in anticipation of a contract: in particular, MSM Consulting Limited [2009] EWHC 121 (QB), Benourad v Compass Group [2010] EWHC 1882 (QB), Fenchurch Advisory Partners v AA [2023] EWHC 108 (Comm) and Jones v Griffiths [2025] EWHC 797 (KB).

Where a party does work at the other’s request in anticipation of a contract that does not materialise, he may be entitled to payment of a reasonable sum for that work: see, e.g., British Steel Corporate v Cleveland Bridge and Engineering Co Ltd [1984] 1 Al ER 504 (Robert Goff J). The authorities in this area were reviewed by Nicholas Strauss QC in Countrywide Communications Ltd v ICL Pathway Ltd [2000] CLC 324. His analysis was then cited and elaborated upon by Christopher Clarke J in MSM Consulting, whose summary it is convenient to set out:-

“170.

In Countrywide Communications Limited v ICL Pathway Ltd [1996] C No 2446 Mr Nicholas Strauss, Q.C., considered the authorities bearing on the question of whether or not a claim can successfully be made for work done in anticipation of a contract which does not materialise. Having considered William Lacey (Hounslow) Ltd v Davis [1957] 1 WLR 932; a number of academic writings; Jenning and Chapman Ltd v Woodman Matthews & Co [1952] 2 TLR 406; Brewer Street Investments Ltd v Barclay Wool & Co Ltd [1954] 1 QB 428; British Steel Corporation v Cleveland Bridge and Engineering [1984] 1 AER 504; Regalian Plc v London Docklands Development Corporation [1995] Ch 212; Marston Construction C Ltd v Kigass Ltd [1989] 15 Con L..116, he concluded:

“I have found it impossible to formulate a clear general principle which satisfactorily governs the different factual situations which have arisen, let alone those which could easily arise in other cases. Perhaps, in the absence of any recognition in English law of a general duty of good faith in contractual negotiations, this is not surprising. Much of the difficulty is caused by attempting to categorise as an unjust enrichment of the defendant, for which an action in restitution is available, what is really a loss unfairly sustained by the plaintiff. There is a lot to be said for a broad principle enabling either to be recompensed, but no such principle is clearly established in English Law. Undoubtedly the court may impose an obligation to pay for benefits resulting from services performed in the course of a contract which is expected to, but does not, come into existence. This is so, even though, in all cases, the defendant is ex hypothesi free to withdraw from the proposed contract, whether the negotiations were expressly made “subject to contract” or not. Undoubtedly, such an obligation will be imposed only if justice requires it or, which comes to much the same thing, if it would be unconscionable for the plaintiff not to be recompensed.

Beyond that, I do not think that it is possible to go further than to say that, in deciding whether to impose an obligation and if so its extent, the court will take into account and give appropriate weight to a number of considerations which can be identified in the authorities. The first is whether the services were of a kind which would normally be given free of charge. Secondly, the terms in which the request to perform the services was made may be important in establishing the extent of the risk (if any) which the plaintiffs may fairly be said to have taken that such services would in the end be unrecompensed. What may be important here is whether the parties are simply negotiating, expressly or impliedly “subject to contract”, or whether one party has given some kind of assurance or indication that he will not withdraw, or that he will not withdraw except in certain circumstances. Thirdly, the nature of the benefit which has resulted to the defendants is important, and in particular whether such benefit is real (either “realised” or “realisable”) or a fiction, in the sense of Traynor CJ's dictum 22 . Plainly, a court will at least be more inclined to impose an obligation to pay for a real benefit, since otherwise the abortive negotiations will leave the defendant with a windfall and the plaintiff out of pocket. However, the judgment of Denning L.J. in the Brewer Street case suggests that the performance of services requested may of itself suffice amount to a benefit or enrichment. Fourthly what may often be decisive are the circumstances in which the anticipated contract does not materialise and in particular whether they can be said to involve “fault” on the part of the defendant, or (perhaps of more relevance) to be outside the scope of the risk undertaken by the plaintiff at the outset. I agree with the view of Rattee J. that the law should be flexible in this area, and the weight to be given to each of the factors may vary from case to case.”

171.

I regard this as a helpful analysis of the authorities from which I also derive the following propositions:

(a)

Although the older authorities use the language of implied contract the modern approach is to determine whether or not the circumstances are such that the law should, as a matter of justice, impose upon the defendant an obligation to make payment of an amount which he deserved to be paid (quantum meruit ): Lacey; for that reason it does not seem to me that section 18 of the Estate Agents Act 1989 has any application to this claim;

(b)

Generally speaking a person who seeks to enter into a contract with another cannot claim to be paid the cost of estimating what it will cost him, or of deciding on a price, or bidding for the contract. Nor can he claim the cost of showing the other party his capability or skills even though, if there was a contract or retainer, he would be paid for them. The solicitor who enters a “beauty contest” in the course of which he expresses some preliminary views about the client's prospects cannot, ordinarily expect to charge for them. If another firm is retained; he runs the risk of being unrewarded if unsuccessful in his pitch.

(c)

The court is likely to impose such an obligation where the defendant has received an incontrovertible benefit (e.g. an immediate financial gain or saving of expense) as a result of the claimant's services; or where the defendant has requested the claimant to provide services or accepted them (having the ability to refuse them) when offered, in the knowledge that the services were not intended to be given freely;

(d)

But the court may not regard it as just to impose an obligation to make payment if the claimant took the risk that he or she would only be reimbursed for his expenditure if there was a concluded contract; or if the court concludes that, in all the circumstances the risk should fall on the claimant: Jennings & Chapman;

(e)

The court may well regard it as just to impose such an obligation if the defendant who has received the benefit has behaved unconscionably in declining to pay for it”

Those statements were then quoted (in part) and followed in Benourad and Fenchurch Advisory Partners.

In the latter case, Sean O’Sullivan QC (sitting as a Deputy High Court Judge) also stated – in substance following § 171(c) of MSM Consulting – that:-

“The court is likely to order restitution where the defendant has received a benefit (e.g. a financial gain or saving of expense) as a result of the claimant’s services; or where the defendant has asked the claimant to provide services, or the defendant accepted them (having the ability to refuse them) when offered, in the knowledge that the services were not intended to be given freely.” (§ 308)

The judge also quoted the statements in Goff and Jones §§ 16-08 and 16-09 that:-

“The dealings between the parties may show that the basis of any transfer that it shall not be paid for unless a binding contract is entered.”

and:-

“An alternative way of approaching the issue of whether benefits have been conferred on the basis that they are to be paid for, is to ask who took the risk of a contract failing to materialise.”

As to the application of these principles, the judge in Fenchurch Advisory said:-

“320.

Put simply, at the time at which the AA was asking Fenchurch to provide advice and assistance with the drafting of the IM, neither party anticipated, or expected Fenchurch to be taking the risk, that the terms of Fenchurch's engagement might never be agreed. It seems to me that both parties were confident that the EL would be agreed; indeed, they were so confident that neither party saw any particular need for urgency. To use the phrase preferred by Nicholas Strauss QC (as he then was): what happened was outside the scope of the risk taken by Fenchurch.

321.

Other factors which seem to me important (using the list set out by Christopher Clarke J in MSM ) include the quantity of work performed and its nature. No-one in their right mind would imagine that Fenchurch would devote hundreds of hours to drafting an IM free of charge, or just in the hope of securing the engagement (like a solicitor engaged in a beauty parade). The fact that the work was ongoing for such a prolonged period while the EL was being negotiated seems to me to make clear that this was not akin to Fenchurch incurring some initial cost while a "subject to contract" negotiation was carried out.

322.

In those circumstances, it seems to me that it would be unjust if the AA was able to take the benefit of the work done by Fenchurch without paying for it, in the entirely unanticipated scenario in which no EL ended up being signed.”

(RMK highlights §§ 321 and 322 in particular.)

Lord Burrows in Barton stated (obiter) that:-

“230.

In my view, free acceptance is not an unjust factor in English law. It appears that past authorities supposedly embracing free acceptance as an unjust factor are better explained as examples of different unjust factors, in particular failure of consideration. And in terms of principle, free acceptance is flawed as an unjust factor because it entails giving restitution to a risk-taker. The objection to free acceptance as an unjust factor was well-put by William Day and Graham Virgo in their note on the Court of Appeal decision in this case, "Risks on the Contract/Unjust Enrichment Borderline" (2020) 136 LQR 349, 354:

"The problem with free acceptance is that it is a watered-down version of a claim for failure of consideration (or failure of a mutual basis for the transfer), which is a long-established ground for restitution that does not undermine the allocation of risk between parties to a contract. The dilution arises because failure of consideration requires the claimant's condition for conferring the benefit to be shared by the defendant. For free acceptance, however, it suffices that the defendant is merely aware that the claimant expects to receive a quid pro quo for the benefit. Because the claimant need not have secured the defendant's agreement to that exchange, it follows that free acceptance rewards risk-taking … Thus, rather than respecting the parties' autonomy, free acceptance cuts across it."”

Those observations were followed by the judge in Barrick Gold, who suggested that Professor Birks’ original formulation of the concept of free acceptance referred to acceptance of the offer of the benefit, thus making the concept indistinguishable from failure of basis (§§ 200-204). Conversely, mere acceptance of the benefit itself, without any express or implied agreement, was insufficient to found a restitution claim (§§ 205ff). In the course of his analysis, the judge distinguished the statement in MSN Consulting § 171(c) quoted earlier on the ground that it did not support the idea of mere receipt as a ground of injustice, “not least because, in the absence of an “incontrovertible benefit” (broadly, a money receipt), it is explicit that it is considering only situation where those services have been explicitly requested” (§ 236). The analysis, in this passage and taken as a whole, does not in my view call into question the statements in MSN Consulting and later cites citing it insofar as they deal with services that have been expressly requested.

Finally, in Jones v Griffiths, Sir Peter Lane stated that, despite Lord Burrows’ observations in Barton, it was clear that free acceptance remained a discrete way in which the principle of unjust enrichment could operate (§ 25). However, the claim failed because the claimant had not shown that he expected to be paid for the services in question, still less that the defendant should have known that (§§ 49 and 57).

ANALYSIS

RMK submits that the parties’ communications leading up to the conclusion of the Advisory Agreement are relevant and admissible because they show that the agreement’s purpose was to appoint RMK to a limited role rather than as a full M&A adviser. It contends that:-

I am unable to accept those submissions. I have aimed to summarise the parties’ discussions in the lead-up to the Advisory Agreement in §§ 54-69 above. Probably the most fundamental problem with RMK’s approach is that the exact scope of RMK’s role was not an established aspect of the aim of the transaction: rather, it was one of the terms under discussion during the course of the negotiations which led up to the agreement on clause 1.1(i) to (v) of the agreement. In substance, therefore, RMK is seeking to deploy things said, and positions allegedly reached, during the negotiations in order to decide the meaning of that clause.

Further, and in any event, in my view the course of the negotiations does not support RMK’s thesis. RMK suggests, for example, that Mr Rodger’s email of 4 July 2016 (§ 57 above) rejected Mr Moore’s suggestion in his 3 July email that RMK be engaged as a “proper adviser”, because Mr Rodger talked about taking a more selective approach and using several firms. I think that is reading too much into the message, especially in circumstances where there were some potential roles in relation to the acquisition that RMK would not be expected or able to fulfil (such as providing debt financing or a fairness opinion), for which Euronav might therefore need to engage other firms. In addition, Mr Rodger’s email to Mr Kirk the same day (§ 58) left open what RMK’s precise role would be. After that came Mr Kirk’s email, asking Euronav to engage RMK as a “full-advisor”, and indicating that RMK had marked up the draft Advisory Agreement “to this effect”. The mark-up added clause 1.1(v) (“Other Advisory related work that would be deemed appropriate for the Transaction”), and that clause remained in the agreement as executed. I do not agree that Mr Rodger’s 8 July 2016 email, in response to Mr Kirk’s of 5 July, turned down RMK’s aspirations for a broad role: see §§ 65-66 above. The email was imprecise precise as to RMK’s envisaged role during the transaction as a whole. The reality is that there was no clear or established consensus as to RMK’s role, other than that both parties were ultimately willing to live with clause 1.1, as amended to include subclause (v), in the contract they each executed. Finally, Mr Kirk’s 14 July 2016 change of the word “Transaction” to “Project” in clause 1.1(v) is in my view of no significance: it simply brought that subclause into line with the rest of the clauses 1-3, which did not use the term “Transaction”. (I deal later with the use of the word “Transaction” in subclauses 4.1(v) and (vi).)

RMK also relied on written and oral evidence from Mr de Stoop and Mr Rodger about their subjective intentions, during the lead-up to signature of the Advisory Agreement, as to RMK’s role in the transaction (for example, Mr Rodgers’s statement in cross-examination that he did not want to engage RMK at all but Mr de Stoop felt that he wanted them to give advisory services around model construction, and Mr de Stoop’s statement that Euronav did not want to engage RMK as a “full M&A adviser”). These are, however, of limited if any real assistance. The parties’ private intentions do not themselves show the genesis and aims of the transaction. Moreover, the evidence indicates that the relevant individuals’ thought-processes progressed, as the communications between the parties and the drafts of the Advisory Agreement progressed. Mr Rodger, for example, said in § 24 of his first witness statement (in a passage on which RMK rely) that he needed a team to take responsibility for producing and updating an acquisition model, intending to instruct a merchant bank later if needed to carry out other work, and that Euronav’s focus was “on the model” (§ 30). However, he also said that he regarded various additional services, such as advising on capital structure, as falling within the draft agreement as it stood even before the 5 July proposed amendment (§ 35). Ultimately, Mr Rodger said, that (as quoted earlier) Euronav was willing to agree to the new clause 1.1(v) in order to allow room for additional services to be provided.

The scope of the services in the Advisory Agreement is defined by reference to the “Project” which is defined in Recital A. Recitals A and B record that:-

“(A)

The Company [Euronav] is studying a possible acquisition of Gener8 Maritime Inc., a company listed on the NYSE (the “Project”);

(B)

The Company wishes to use the services of the Advisor [RMK] as an independent contractor for the development of an offer document for the Project as further defined hereunder;”

RMK submits that the “Project” was the study of a possible acquisition of Gener8, which concluded not later than the making of an offer pursuant to the offer document contemplated by recital B, and is to be distinguished from the “Transaction” (i.e. the acquisition of Gener8) referred to in clause 4.1(v) and (vi). As a result, any work done after Euronav had submitted an offer to Gener8 fell outside the scope of the agreement.

I am unable to accept those submissions. The natural reading, as a matter of ordinary syntax, of recital A is that the “Project” means the possible acquisition. That interpretation of “Project” then makes perfect sense with recital B: Euronav wishes RMK to develop an offer document for the possible acquisition. The idea that an offer document might, instead, be prepared for the study of a possible acquisition is strained: an “offer document” naturally refers to the document to be sent to Gener8, rather than an internal document used for the purposes of a study. Clause 1.2 would make little sense if the Project were merely a study, as it is hard to see why a study would require US broker-dealer registration. Other provisions also point towards the Project being the possible acquisition rather than merely a study:-

RMK submits that point (ii) above does not assist, because a success fee is a standard form of remuneration for discrete services (whatever their extent and duration) in the M&A industry, relying on section 12 of the experts’ Joint Memorandum and some evidence Mr Pedder gave in cross-examination. Section 12 of the Joint Memorandum concerned the question “What is the usual method(s) of remunerating a party in the position of RMK for any additional service?” The Memorandum recorded that the experts “Agreed with respect to what the usual method of remunerating a party in position of RMK for any additional service”, albeit the precise extent of agreement is not entirely clear. Mr Knight’s comment, so far as relevant, was:-

“Specific small services are usually paid with a lump sum. RMK were renumerated by a success fee a) to control costs for Euronav in the event of the transaction not going ahead, and b) to incentivise RMK to update and explain their model. ”

Mr Pedder said:-

“The remuneration method would depend on what the additional service was. The remuneration structure in the Transaction suggests there was an element of M&A advisory work as part of the fees were dependent on a successful outcome. I would therefore have expected that any additional service would be remunerated in the form of a lump sum success fee, unless the additional service could be seen as a totally separate workstream, in which case another milestone fee could have been agreed”

and cross-referred to § 57 of his report, where he said:-

“In this case, the fees were structured with milestones with some of the fee linked to a successful closing. This would suggest that the agreed scope of work did involve a degree of advisory work. Had the scope of work simply been to develop a model, you would expect to see a fixed fee not dependent on a successful outcome. Success fees tend to be agreed where the advisor in question is able to influence the outcome of a transaction (i.e., through their analysis or advice provided). This is further indicated by one of the milestones being triggered when certain investors agreed to the deal, suggesting RMK was expected to play a role in convincing such investors to agree to support the transaction. This supports my view that, that to the extent that the Court finds that RMK did provide services in addition to what had been agreed, and these would be deemed M&A advisory services, I would expect this to be remunerated in the form of a success fee.”

In the oral evidence on which RMK relies (expanded to show his full answer rather than merely the first word), Mr Pedder said:-

“Q. Okay, lump sum success fees, Mr Pedder. If we go to D1/88. Paragraph 56, where you are talking here about additional fees for additional services, and you say remuneration for an additional service would be in the form of a lump sum success fee. You are considering fees for individual additional services, is that right?

A. Yes, I mean it's -- my Lord, the question here is "additional services" without specifying what they might be. I'm talking about a new work stream. So it would have to be a service that could be provided stand-alone, right? Something that could be added to an already agreed scope of work.” (Day 7/139-140)

Mr Pedder went on to explain that core buy-side advisory services are very integrated, and one would not split them up e.g. by having one adviser doing the modelling, another the structuring and another the negotiations (Day 7/140-141). Further:-

“As I said earlier, a lot of the important information comes out of the model, right? It goes into the model, comes out of the model, right? Things that you find out in due diligence will affect in terms of how you build the model. You know, it may bring up structuring issues. It may give you input for how you would negotiate the deal. So yes. So modelling is key. Therefore, I think companies would want the same firm to be doing the modelling as the firm that's also providing the advice.” (Day 7/142)

In response to questions about the remuneration of advisors being asked to carry out individual services separately, Mr Pedder said:-

“The only thing you could conceivably look at is you could have somebody else prepare a model. You could have someone prepare a model. If you had somebody prepare a model and that was their task, I think you would find a party who might do it on an hourly basis or a fixed cost. You know, it wouldn't be linked to successful outcome of the deal, whatever. If all you are asking is an exercise, build this model, this is what we want you to do, and it stops there then the model's going to be handed over to someone else. So having somebody build the model, yes, it would cost something but it wouldn't be hugely expensive compared to success fees and M&A.” (Day 7/148)

I do not consider this evidence to support the proposition for which RMK relied on Mr Pedder’s evidence, namely that the remuneration structure in the Advisory Agreement was consistent with RMK having a limited model-related role in the early stages of the transaction (up to the time at which an offer was made to Gener8). Rather, the evidence indicates that the remuneration structure, with staged payments up to and including the completion of the transaction, suggested that the parties envisaged RMK having a continuing role throughout the process. I do not accept the suggestion that its objective was simply to limit Euronav’s costs of the transaction did not go ahead.

Finally on this topic, I do not consider that the references to “Transaction” in clause 4.1(v) and (vi) have much significance. Unlike “Project”, the word “Transaction” is not defined in the agreement, which is relatively informally drafted. It may be a relic of an earlier draft of the agreement, though the evidence does not establish that one way or the other. In any event, viewed in the context of the agreement as a whole, I do not accept the view that it sheds light on, and diminishes, the scope of the word “Project”.

RMK also argued that much of the modelling work it did during the transaction related to a “transaction model”, and that that is different from an “acquisition model”, which is the term used in the Advisory Agreement. RMK cited parts of the witness statements of Mr Kirk and Mr de Stoop, and the evidence in section 4.12 of Mr Knight’s report.

Mr Knight said:-

“4.12.3

An acquisition model looks at the financial profile of the combined entity, the objective is to assess whether the deal adds value for the acquirer’s shareholders. 4.12.4 A transaction model is more detailed and will be used for deal structuring and to monitor compliance with financial and operational constraints. A transaction model is more strategic than an acquisition model because at this point, the transaction has moved past an acquisition model which was only to study the deal. With a transaction model, you are no longer studying the deal but rather are providing more detailed input into an active transaction and providing direction on, amongst other things, deal structure.”

Mr Kirk in § 93 of his first witness statement said:-

“By July 2017 it had stopped being an Acquisition Model and had become a Transactional Model (although some work had been done prior to this date had been done which extended beyond the scope of the Advisory Agreement), i.e. it had ceased being a “study” and was the live deal that was now being done. It went from being an internal document to an external document that was shared with the board, directors and shareholders. ”

Mr de Stoop in his second witness statement said at §§ 21- 25:-

“21.

… First of all, although I agree that if we analyse the technical terms, there is a big difference between what is expected of an “acquisition” model in comparison to a “transaction” model, that is not to say that I engaged RMK to produce an “acquisition” model in this sense. RMK were very much aware that Euronav required a dynamic transaction model for this Transaction.

22.

To explain the technical terms, an acquisition model is a static model. It is something which I could have created during the exploration stage of the Euronav and Gener8 merger within one or two hours. To create an acquisition model, I would do the following:

Stage 1 – list all the assets. The main asset for both companies is their fleet of vessels. I would therefore simply log on to a valuation website, such as “www.vesselvalues.com”, where I would have access to the valuations of practically all the vessels in the world. I would note down the relevant figures for each fleet and plug the numbers into the model.

Stage 2 – list the debt and/or any liabilities of each company, to arrive at the net asset value. As part of this process, I would analyse the (publicly available) annual reports of each company to consider the liabilities, as well as conduct my own research into the companies to understand if there are any off-balance-sheet liabilities.

23.

By the end of this task, I would have a nearly perfect picture of what the merged company would look like. What is important here is that I could go back to the board of Euronav and explain that, if we were to go ahead with a merger between the two companies, the Euronav shareholders reaction to the same would represent, for example, 58% of the company and Gener8 shareholders would represent 42% (i.e., Euronav shareholders would still be dominant post-merger). I would say an “acquisition model” is more of a “spreadsheet” than a “model”, as it is not something to necessarily be updated.

24.

In comparison, a “transaction” model is incredibly dynamic. It is something which takes a lot of time to produce and is constantly updated throughout the Transaction. In fact, a good transaction model is something which is extremely flexible and can be updated quickly to play with different scenarios, so that we can see the impact of making a certain decision. The model is a key tool for negotiation in a transaction, as it is presented to a buyer/seller on the other side to compare figures. It is not until around completion that you start to see a real shift in the numbers set out in the transaction model – this is the point in the negotiations where each party starts to ‘get some’ and ‘give some’. This is why we needed RMK onboard for the Transaction from start to finish. We needed a team to dedicate the time and be available to constantly update the model as and when required, in response to the ongoing negotiations between the Euronav management team and Gener8/UBS.

25.

I think that I made my intentions clear to RMK that what I required their team to produce was a dynamic “transaction” model. As per the Advisory Agreement, RMK were required to “keep the model updated to the extent relevant with any information to which becomes privy in relation to Gener8 Maritime Inc., the Company, the Project or possible completion” [HDS1/13-18]. What I instructed RMK to do was to produce various iterations of a transaction model throughout the Transaction cycle.

…

27.

The words “acquisition model” in the Advisory Agreement should not be interpreted as a requirement for RMK to produce a static model in the technical sense. To be honest, before reading MK and RM’s witness statements, I would have never thought to differentiate “acquisition” and “transaction” into their technical terms. RMK were aware of the standard of work that they were required to produce. It is particularly interesting that the “acquisition” model that RMK originally produced during the exploration of the Transaction is the same and/or similar type of model as the “transaction” model that RMK later produce around the time of completion. It seems to me that these so-called differences between the models is a bit of a reach from RMK’s side. ”

In his oral evidence, Mr de Stoop explained that, whilst he understood how one could draw distinction between a model called an ‘acquisition model’ and one that is called a ‘transaction model’, it was not a distinction that was standard in the industry. His understanding of how one might draw a distinction between an ‘acquisition’ model and a ‘transaction’ model appears to have come from internet research after receiving Mr Kirk’s witness statement referring to the distinction. He said it was not a distinction he was aware of or made at the time of the Advisory Agreement.

Based on that evidence, RMK submits that:-

RMK did not plead any such case, and I am in any event unable to accept it. The case is closely linked to RMK’s contention, which I have rejected, that the “Project” to which the Advisory Agreement was confined to “studying a possible acquisition of Gener8”. On the (correct) basis that the “Project” meant the proposed acquisition, the reference in clause 1.1(i) to the “project” can be seen to be a reference to the acquisition too. (In the context of a short and fairly informal contract such as the Advisory Agreement, I do not consider it significant that the word “project” in clause 1.1(i) lacks an initial capital. There is no indication in the agreement that “Project” and “project” were intended to mean different things.) Thus, clause 1.1(i) required RMK to develop an acquisition model for the proposed acquisition itself, not merely for a study of a possible acquisition.

Moreover, clause 1.1(iii) required RMK to keep the model updated, inconsistently with the notion that only a static model was required. Further, the requirement in clause 1.1(iv) to explain the model to third parties, if requested, points against the idea that the model was merely an internal one to help Euronav study the possible acquisition. That requirements is also hard to square with the idea that the model would cease to be relevant once an active transaction was taking place, and far more consistent with the idea of a dynamic model that would be shared and discussed with the target company, banks, shareholders in the acquirer and target and potential investors.

A further pointer is the provision in clause 1.1 for RMK, if requested, to develop the model directly on Euronav’s server via a dedicated remote connection, which would “also allow for the exchange of information required for the development of the model”. Such a provision makes far more sense if the parties had in mind a dynamic model that might, for example, need to be applied to various potential scenarios based on non-public information, and then used for negotiations, than if the model were merely to be a static one.

Further, by the time the Advisory Agreement was fully signed, RMK had already almost finished the first version of the model, which would make it surprising if its future obligations and fee entitlements under the agreement did not require any significant more work on the model. The essential form of the spreadsheets comprising the model then did not change from the version as it stood when the Advisory Agreement was signed in July 2016, to the versions produced after Mr de Stoop’s input in August 2016, after Euronav’s board approved it in September 2016, and as shared with Euronav on 16 November 2016. Rather, the same model was ‘updated’ from time to time (and that is the term RMK frequently used for the process).

Turning to the scope of clause 1.1, RMK submits that the primary obligation is that in subclause (i), to develop, the model and that the other subclauses should be read in that light, applying an ejusdem generis construction. Further, RMK says, significant weight must be given to recital B, which provides a temporal longstop: the submission of an offer document. I am unable to accept those submissions.

Clause 1.1 describes five “main services” that the parties intended RMK to provide. Subclause (i) relates to the development of the model. Two other subclauses, (iii) and (iv), refer to the model but are not limited to modelling work: subclause (iii) includes an obligation to keep Euronav informed “with any information to which [RMK] becomes privy in relation to Gener8 Maritime Inc., [Euronav], the Project or possible competition”, and subclause (iv) concerns explaining the model to named individuals and advising Euronav of the outcome of such meetings. Subclause (ii) does not refer to the model at all, and requires RMK to “[a]ttend all meetings related to the Project by phone or in person, if so requested by [Euronav]”. Subclause (v) is broadly expressed, referring to “[o]ther Advisory related work that would be deemed appropriate for the Project”.

In my view, the subclauses of clause 1.1 (or any combination of them e.g. (i) to (iv) viewed together) are not of one genus, save in the broad sense that they all relate to M&A advisory services. They include duties capable of applying to all stages of the acquisition process. Similarly, recital B refers to the development of an offer document, but does not exhaustively state the scope of RMK’s role (and the words “as further defined hereunder” tend to suggest that the recital is not to be read in isolation). Recital B must in any event be considered in the light of (a) the breadth of the operative wording in clause 1, (b) the fact that (in my view) the “Project” means the proposed acquisition and not merely a study, (c) the remuneration structure providing for payments up to and including completion as discussed above and (d) the provisions of clauses 2.1 and 2.2, which expressly indicate that the Advisory Agreement will continue until the completion of the Project, i.e. the acquisition (and thus contradict any suggestion that RMK’s work would end on the submission of an offer to Gener8).

In those circumstances, I do not think it justifiable to adopt a restrictive reading of the subclauses of clause 1.1, including subclause 1.1(v). The latter clause seems likely to reflect the point that, as Mr Pedder explained it, M&A buy-side advisory services are interlinked and hard to separate out. In principle, that sub-clause is easily capable of covering such matters as advice or discussions about the capital structure of the deal, advice or discussions relating the value of the assets to be utilised in the model, due diligence for the purposes of obtaining information relevant to modelling work, relaying information to the client based on the input into and output from the model, and discussions with third parties more generally. Conversely, on RMK’s approach it is difficult to find any real content at all for subclause (v).

RMK points out that clause 1.1(v) does not refer, expansively, to “any” advisory-related work, or use the word “whatsoever”; and that the ensuing wording stating that subclauses (i) to (v) are not exhaustive and may be changed by written agreement. RMK says this indicates that subclause (v) is not to be expansively construed and is not unlimited. However, none of those considerations suggests that the subclause should be narrowly construed. By its natural language, it is capable of covering a broad range of activities, provided that they are advisory-related work in relation to the proposed acquisition. RMK also suggests that the words “advisory-related” underscore the limitation of RMK’s role to the development of an offer document as indicated in recital B. I do not agree that the words “advisory-related” have that effect, nor (for the reasons given above) that that is the effect of recital B.

RMK suggests that the clause about the development of the model on Euronav’s server does not envisage the model, or any part of it, being provided to Gener8 or UBS, or information exchanges between Euronav and Gener8/UBS that might impact on modelling as happened during negotiations and diligence. I do not agree. The clause concerns an aspect of how RMK and Euronav are to work together in relation to the development of the model. It does not preclude exchanges of information with Gener8 or UBS, whether involving disclosure of parts of the model or impacting on the model. Moreover, clause 1.1(iv) positively envisages explanation of the model to third parties.

I consider in this section whether the main tasks RMK undertook fell within or outside the scope of the Advisory Agreement, in the light of the conclusions I reach above about its correct interpretation.

As a preliminary matter, it is worth noting that by the date on which Euronav’s board executed the Advisory Agreement, 25 July 2016, RMK had already sent Euronav the first version of the model in “Final Draft Form”. On RMK’s case, it would follow that most of the work done, even in the weeks immediately following execution of the agreement, with the exception of periodic updating and discussion of the model, fell outside the scope of the Advisory Agreement.

For example, discussions began the very next day of production of the Board Book: as noted earlier, Mr Kirk on 26 July 2016 said he would “take a first crack at a Board book”. Had anyone thought that work to fall outside the scope of the Advisory Agreement, one might have expected that to have been raised, and indeed to have been a source of surprise: since it would mean that the Advisory Agreement did not cover work on which RMK was embarking the day after its execution. In addition, the greater part of the first ‘cut’ of the Board Book was produced by Mr Kirk’s junior employees, particularly Ms Motyka, in mid August 2016 making significant use of material from the model. In my view the Board Book was closely related to the model, albeit not identical to it, and was in substance one vehicle whereby the contents of the model were to be explained to Euronav’s board. In my view, it was an aspect of keeping the company informed about information in the model and/or otherwise relating to the proposed merger and its parties, within clause 1.1(iii) of the Advisory Agreement, failing with a facet of other advisory-related work within subclause (v).

The Pitch Book, too, was closely linked to the model, as described earlier. Both the Board Book and the Pitch Book served purposes similar to the model, in that all three were tools or presentations used to help Euronav assess the financial and other implications of the contemplated merger and whether it should be recommended to Euronav’s shareholders. I consider the Pitch Book work to have fallen within the Advisory Agreement on the same basis as the Board Book.

The pieces of deal structuring advice RMK provided in late October 2016, early January 2017 and mid April 2017 (see §§ 84-86, 103 and 130) also had a link to the model, since the model could be adjusted in order to test the consequences of different deal structures. Moreover, Mr Knight stated that a transaction model involves providing detailed input into an active transaction and providing direction on, among other things, deal structure (§ 4.12.4, quoted earlier). That statement is applicable here, on the footing that (as I have concluded) the Advisory Agreement required RMK to maintain a dynamic model up to and including the active transaction stage.

In addition, deal structuring advice was it was in my view “[o]her Advisory related work that would be deemed appropriate for the Project” within clause 1.1(v) of the Advisory Agreement.

As to what is described as the ‘advice’ on the Gener8 employment/consultancy contracts, in late November 2017, in reality this comprised no more the provision of some factual information Mr de Stoop had requested (because he was trying to find a mechanism to incentivise certain people in Gener8), namely whether two individuals’ contracts contained notice periods, whether the proposed termination of two other individuals’ consultancies simply reflected the expiry of their contracts, and whether their consultancy agreement had a change of control clause (and, if so, the consequences). I do not consider that any of that can be described as deal structuring or (as Mr Kirk put it) strategic advice: it was a request for factual information to enable Mr de Stoop to make any strategic decision involved. It was, however, closely related to the model, because it concerned one of the consolidation costs of the merger and seems likely to have been information RMK would have had a result of building the model; and in my view fell within clause 1.1(iii) and/or (in any event) clause 1.1(v) of the Advisory Agreement.

So far as valuation advice is concerned, I agree with Euronav’s basic submission that ascertaining the two merger parties’ net asset values (NAVs) is a fundamental and central part of developing the model. Thus establishing the value of the components of each party’s NAV is an inherent part of the building and maintenance of the model. That in itself makes it difficult to see how valuation advice falls outside the obligations in Advisory Agreement clause 1.1(i) to develop the acquisition model, keep it updated and explain it. Even if not otherwise caught, such advice would fall within clause 1.1(v). Further, the following points should be noted as regards specific aspects of the valuations highlighted by RMK.

Turning to negotiations between RMK and UBS, Euronav accepts that RMK and UBS were in direct communication in respect of the parties’ respective NAVs and modelling. It is also the case that some of those discussions could be described as ‘negotiations’, in the sense that RMK, under Euronav’s direction and with Euronav having the final say, was explaining and seeking to persuade UBS to accept aspects of Euronav’s valuations. As part of that process, as Euronav accepts in its written closing, RMK and UBS sought clarification of calculations from one another and challenged each other’s calculations and inputs used to arrive at the respective NAVs.

Mr Steve Smith, formerly of Gener8, in his hearsay statement states that RMK was introduced to him as Euronav’s M&A advisor by Mr de Stoop, that RMK took “a front seat in the negotiations on behalf of Euronav”, that he “always assumed that RMK was the M&A advisor appointed on behalf of Euronav”, and that “[RMK] negotiated with Gener8’s bankers, UBS, and were considered by those of us on the Gener8 side as Euronav’s M&A advisors”. Similarly, Gener8’s Schedule 14A information stated that:-

“From August to October 2017, representatives of the Gener8 Transaction Committee and UBS continued to negotiate with representatives of Euronav and RMK regarding, among other items, proposed adjustments to each of Euronav’s and Gener8’s NAV, the appropriateness of such adjustments and certain components of NAV for purposes of agreeing on a fixed exchange ratio, which would ultimately be the result of the final relative NAV calculations of Euronav and Gener8, as negotiated between Euronav and the Gener8 Transaction Committee, with assistance from their respective advisors. This included a meeting on August 17, 2017 between Mr. Smith and the Chief Executive Officer and the Chief Financial Officer of Euronav, along with a representative from RMK”

Euronav’s own filing contained the same statement, referring also to several other sets of negotiations with representatives of Euronav and RMK particularly in October and December 2017.

I do not accept Euronav’s submission that any negotiations RMK entered into with UBS took place without Euronav’s authority. There are indications that, in July 2017, Mr Rodgers had some concerns in that regard. In an email of 10 July 2017 he said “I think Mike needs to be stopped right now. This is drifting into an unplanned negotiations without analysis of how the arguments on value will play out”; and in a message to Mr Kirk on 13 July 2017 (in response to a request for approval to send something to UBS) Mr Rodgers stressed that “You may not send anything out until you have authority from either myself or Hugo. For the sake of clarity.” In his first witness statement, Mr Rodgers said:-

“… RMK did not have authority or instructions to represent Euronav in negotiations at any point throughout the Transaction. MK is therefore wrong to state in paragraph 138 of MK1 that RMK had a mandate to negotiate commercial issues with Gener8 and/or UBS. This was not what was discussed in our telephone conversation of 30 June 2017. Instead, I thought it would be easier if RMK and UBS opened a direct stream of correspondence to discuss and/or explain the respective models (i.e., the source and/or method used to achieve their figures). This is entirely different to a negotiation, where both parties reach an agreement on the final figures.”

However, that evidence confines the idea of ‘negotiation’ to a process in which the negotiator has authority to bind his client to an agreement. In fact, on the evidence of Mr Pedder as well as Mr Kirk, that is not typically the case in an M&A negotiation: the client always has the final say. RMK did not purport to enter into binding agreements as to NAV on Euronav’s behalf; and in his oral evidence Mr Rodgers accept that (as is evident from the documents) the proposals put and positions adopted by RMK in its discussions with UBS (including during the period of these messages from Mr Rodgers) occurred in close liaison with Euronav, particularly Mr de Stoop, and with his prior authorisation. Mr de Stoop recognised that in relation to the FSO JV, for example, he and RMK were working collaboratively to maximise the Euronav valuation, and he was very happy with the outcome. He accepted that the process included challenging UBS’s assumptions through RMK, RMK seeking to persuade UBS of the validity of Euronav’s assumptions, and Mr de Stoop engaging in the same process vis a vis Steve Smith: though Mr de Stoop added that “if I have to choose who do I need to persuade let em tell you that I prefer to persuade Mr Smith of Gener8 than Mr Smith of UBS … He’s the ultimate decision-maker”.

As Euronav points out, there were highly significant direct negotiations between and Gener8, resulting in agreement finally being reached on contentious points. Examples of such direct negotiations are the meeting on 17 August 2017, the 6 September 2017 call between Steve Smith, Mr Rodgers and Mr de Stoop, the further call with Steve Smith about the long-term business relationship value, and the contacts between Mr de Stoop and Mr Smith from 12-19 September 2017 which resulted in agreement on the valuation of the FSO JV. (RMK makes the point that few emails between Euronav and Gener8 were disclosed, compared to the number between RMK and UBS. However, that is not a particularly telling point in circumstances where communications between Euronav and Gener8 were not a focus in the agreed list of issues for disclosure in this case.)

It does not follow that RMK’s dealings with UBS cannot also accurately be described as ‘negotiations’. However, ‘negotiations’ is not a term of art whose absence from the Advisory Agreement is necessarily significant. The question is whether the negotiations RMK engaged in were of a kind which fell outside clause 1.1 of the Advisory Agreement. Mr Pedder’s evidence was that an M&A adviser may lead or assist with negotiations, and indeed RMK in its written closing made the point that Mr Rodgers “accepted that the work RMK did during negotiations was what he would expect of an M&A advisor”.

RMK submits that:-

“The real question is - what was RMK doing in relation to NAV: was it simply (“initially” or at an “evaluation” phase) modelling each company’s NAV in the abstract, for the purposes of a study of the possible acquisition (or at the highest, the development of an offer document)? Or had it stepped out of the laboratory in order to negotiate each company’s NAV to achieve an advantageous deal ratio? (If there is any doubt about this, Mr Pedder agrees that modelling and negotiations are different tasks: [7/74/18-20].)

For the reasons given below, RMK submits that it was the latter. This is rightly not something which Messrs Rodgers and de Stoop envisaged RMK doing when the Advisory Agreement was concluded (see, respectively, [4/56/13-14] and [5/69/14-21]). The Advisory Agreement carved out a limited, pre-offer, “evaluation phase” (to adopt Mr Rodgers’ wording) role for RMK. The notion that RMK would be going into bat with UBS on an active transaction approved by the Board was the last thing intended.” (§§ 245-246)

However, that approach would be correct only on the narrow view of the Advisory Agreement which I have rejected. The Advisory Agreement was not confined to modelling, internally, at a limited pre-offer evaluation phase. It covered work in the specific areas through the whole of the transaction up to and including completion, and including meetings about the model and approaching third parties to explain it. Further, I do not consider that the evidence cited in the passage quoted above supports RMK’s view. Mr Rodgers’s evidence at Day 4/56/13-14 was:-

“MR RUSSELL: Yes. In June/July 2016, when you were having your negotiations with RMK, you didn't envisage that RMK would be going into the room with Gener8's M&A advisor to negotiate net asset values and deal ratios, did you?

A. We envisaged them as described in the agreement that they would go in and explain the model.

Q. Well, again, that is arguing about what is the proper construction of the contract that we now see. When you spoke to them you did not suggest that they would be doing the negotiation, did you?

A. No and I don't believe that they did do the negotiations.”

However, that merely reflects Mr Rodgers’s narrow view of the term ‘negotiations’. It is clear that Mr Rodgers did not consider that the Advisory Agreement limited RMK’s role to initial modelling work as distinct from engagement with other parties during the active stage of the transaction. He went on to say:-

“A. Well look, it -- the point that you're emphasising is that to underplay the significance of the model and the fact that as a financial advisor presenting – preparing that model it is axiomatic that you will then present it, explain it and that that will be part of a process of determining value between the business entities.

Q. Mr Rodgers, I'm not making any point. I'm just asking you what you said to Mr Moore and Mr Kirk.

A. The -- I think the construction of the way that you've put your point was to underplay the value of the work. The work is very important, but I think what you – what we're not trying to suggest here is that they simply worked in a back room on a model and nobody ever saw them. It was very clear from the agreement and it is very clear from the way that we work in understanding value that the person who had prepared and done all the modelling work would have to demonstrate that value to the people that were going to rely on it. Those people wouldn't just be Euronav, they would be outsiders who we would list it as a possibility and had stated would be a possibility because that's the critical part of going through a common understanding of value that will allow a business combination to take place.” (Day 4/58/21 – 59/18)

Mr de Stoop’s evidence at Day5/69/14-21 was:-

“Q. And what you certainly did not have in mind in early July 2016 is that it could be RMK who would be going in to bat to negotiate net asset values with Gener8's M&A advisor. That's correct, isn't it?

A. It's not only correct, it's not what I saw them doing.

Q. Well, we'll come back to that in a moment. And to the extent that you discussed this with Mr Moore or Mr Kirk, that is very much the impression that you would have conveyed, that you did not envisage that they would be doing any negotiating work in relation to net asset values down the line?

A.

I didn't have that conversation with them.”

Again, it is evident from the answer at line 14 that Mr de Stoop was taking a restrictive view of the nature of ‘negotiation’. It is clear from his evidence as whole that he did not consider the work RMK was doing to fall outside the scope of the Advisory Agreement: see, in particular, §§ 114-116 and 230 above.

In my view, this work fell within clause 1.1(ii), (iv) and/or (v) of the Advisory Agreement.

As noted earlier, RMK suggested at trial that its model changed, over time, from being an ‘acquisition model’, as required by the Advisory Agreement, and a ‘transaction model’, outside the scope of the Advisory Agreement. I have rejected that argument in section (G)(1)(c) above.

A distinct facet of this argument concerns Mr de Stoop’s 3 November 2017 request, which RMK says led to a ‘transaction model’ being produced (at the latest) by 16 November 2017. This was the stage at which Mr de Stoop wrote that “… we need to work on a model and a pro forma financials of the combined group to present to banks but also the market in general. RMK proposed and agreed to change their model from proportionate to Equity method to be aligned with the way we present our numbers”; leading to a model provided by Mr Keros of RMK on 16 November 2017 and an updated version on 21 November 2017 (see § 196 above). However, this was in substance no more than the production of a further updated version of the model, incorporating a change of accounting methodology in order to make it more readily explicable to certain third parties by corresponding to how Euronav presented its accounts to the market. That was, in my view, an example of a request to update and explain the model within clause 1.1(iii) and/or (iv) of the Advisory Agreement. Failing that, it was closely related advisory work falling within clause 1.1(v).

It is common ground that RMK provided some assistance in relation to due diligence. It took on a coordinating role, involving uploading documents, relaying questions and keeping track of responses. RMK accepts that much of the due diligence related to legal and tax issues, in which M&A advisors are not typically involved, and the majority of UBS’s questions required agreement or details that only Euronav or its lawyers would have been able to provide. However, an M&A adviser’s role in due diligence is typically administrative, and UBS’s due diligence timeline envisaged RMK having the same role for Euronav as UBS did for Gener8 (save that, as the sell-side adviser, UBS set up the data room).

In addition, RMK says it provided due diligence analysis, including responding to Mr de Stoop’s queries arising out of documents provided by UBS on 7 July 2017, advising on Gener8’s lease on 10 July 2017, giving detailed comments on UBS’s diligence request list on 19 November 2017, providing a breakdown of Gener8’s shares on 28 November 2017, advising on the lending secured by Gener8’s vessels on 6 December 2017, and analysing Pool Agreements, which then enabled RMK to advise Euronav on whether Gener8 vessels should be transferred into the International Tankers Pool.

Viewing the due diligence exercise more broadly, Euronav points out that Euronav and Gener8 themselves carried out extensive due diligence on each other’s records during the period from about late October to end December 2017. On the Euronav side, there was a large internal team of at least 13 people from Euronav, led by Ms An Goris, together with a team from SewKis, totalling at least 38, who carried out the vast majority of the work (with Motyka of RMK managing its status). On the Gener8 side, the work was carried out by a team of 58, including a large team from UBS. Euronav which set up the data room from its side and granted access to RMK. RMK would not have had the resources to carry out the due diligence exercise even if it had been asked to. Ms Motyka carried out an administrative role by tracking the due diligence process and passing on requests made by one side to the other.

Euronav accepts that RMK also had a small role in identifying what it had already sent to UBS, what it had not and missing information that Euronav would need to provide.

The involvements referred to in § 332 above were in general closely related to the task of keeping the model updated.

Overall, I consider that RMK’s work in relation to due diligence was either part of the ongoing updating of the model, within clause 1.1(iii) of the Advisory Agreement, or related work falling within clause 1.1(v).

The Share Purchase Agreement was produced by the parties’ lawyers, but RMK says it was consulted on the drafting of the precursor term sheet and provided input on the Share Purchase Agreement. It refers in its opening to the involvements referred to in §§ 184 (draft exclusivity agreement), 192, 197, 198 (pool fees) and 199 (RSUs and options) above. RMK’s input to the draft exclusivity agreement was slight and peripheral. The involvements referred to in §§ 192 and 197 did not involve any substantive input by RMK into the envisaged contents of the SPA. I have already commented on the § 198 involvement, relating to the tanker pool arrangements, in § 335 above. The discussions about RSUs and options (§ 199) had an obvious link to the NAV ratio for the merger which was the focus of the model. All of these matters fell within Advisory Agreement clause 1.1(iii) and/or (v).

I have summarised RMK’s involvement in the Gener8 debt rollover discussions in §§ 212-223 above. RMK claims that this is an issue on which it advised Euronav and which fell outside the scope of the Advisory Agreement. Mr Pedder’s evidence was that an M&A advisor’s role can include leading or assisting with the structuring and financing of a transaction. RMK says it did more than merely interrogating the model projections, noting for example that the simplified model it was asked to produce for KEXIM contained new information and in substance was an entirely new model. RMK submits that all this work was done post-offer and post-study: its goal was to help close the deal after it had been voted for an announced, by providing advice that the merged business would be sufficiently healthy to warrant rolling over the debt

In my view, RMK overstates its role here. There is no evidence that RMK provided advice to Euronav, as distinct from adjusting and re-running scenarios in its model in order to fulfil information requests from the lenders. Mr de Stoop’s evidence, which I accept, was that he liaised direct both with Citi and Nordea and with the lenders, KEXIM and K-Sure; and that he “travelled to South Korea and China to sit down with the lenders to explain the deal, robustness of the balance sheet and export credit agent. RMK, however, did not attend and would not have had a seat at this table.” As part of the process, the lenders wished to interrogate the economic projections in the model and to see various ‘stressed’ market scenarios in order to test their robustness. Here, Euronav turned to RMK for further details and iterations of the model projections, and for the simplified version requested by KEXIM so that it could interrogate the projections itself. Even on the footing that the simplified model for KEXIM took Mr Keros two long days to produce and included certain new inputs, it did not involve building a new model from scratch and remained closely related to the existing model.

I also do not accept the suggestion that the work in relation to the rollover could not fall within the Advisory Agreement because the merger had by then been approved and announced. Under clause 2.2 of the Advisory Agreement, it continued until the completion of the Project, i.e. the acquisition of Gener8, which did not occur until June 2018.

In my view, RMK’s involvement in the rollover amounted to the updating of the model, within clause 1.1(iii) of the Advisory Agreement, and/or other advisory related work within clause 1.1(v) (noting Mr Pedder’s evidence, on which RMK relies, referred to in § 338 above). It might also have constituted explaining the model to third parties, within clause 1.1(iii), but for the fact that that sub-clause appears to envisage explanations provided in meetings.

RMK provided input on KMPG’s fair value assessment, which it says was akin to an auditing process and had nothing to do with the acquisition model. I have summarised RMK’s involvement in §§ 231-232 above. RMK says the deal ratio calculation was the product of negotiations between RMK and UBS. Further, it would not have made any sense for Mr de Stoop to request a further iteration of the acquisition model to resolve KPMG’s queries, and that is not what he did. RMK says it also provided Euronav with support in relation to its F-4 filing, as summarised in § 224 above. RMK says it was very much SewKis’s point of contact during the drafting of the filing in relation to issues such as the agreed NAVs. All this work contributed to deal closure and could not, RMK says, have been related to the study of any possible transaction or the now long redundant acquisition model.

So far as the fair value information is concerned, this seems to me a clear example of work done to update the model and/or explain it to a third party, as envisaged by Advisory Agreement clause 1.1(iii) and/or (iv). To the extent that subclause (iv) might not strictly apply because the input was provided by email rather than in meetings, the work remained closely connected to the model and was covered by subclause (v). Similarly considerations in my view apply to RMK’s input to the F-4 filing. Much of the input involved information it had had to collate/analyse in order to prepare the model. In any event, however, I do not consider that liaising with other professionals (such as SewKis) involved in the same transaction, to assist in respect of matters in which RMK had direct knowledge and involvement, could realistically be regarded as work above and beyond the services required by the Advisory Agreement. It was covered at least by clause 1.1(v) as other advisory-related work.

RMK submits that the contacts between the parties referred to in sections (E)(6), (8), (10), (11), (13), (15) and (17) above, and some of the events referred to in section (E)(19) above, demonstrate “the joint basis that RMK was providing additional services in return for additional payment of which would be a reasonable fee”.

I do not accept that submission, for three reasons.

First, the terms of the Advisory Agreement in my view leave no room for a restitutionary claim, even in respect of extra-contractual services. That is not merely because it contained, in clause 12.3, a ‘no oral variations’ clause, though that is a relevant consideration. More particularly, the agreement contained two provisions specifically directed towards the possibility of expanding the scope of the services to be provided:-

To my mind, those provisions reflect a clear consensus that if additional services were required, then a written document would be needed. That would provide both parties with clarity about the scope of the additional services and the terms on which they were to be provided. Among other things, these provisions were evidently designed to avoid either party seeking to argue, by reference to oral conversations (minuted or otherwise), emails, text messages and so on, that extra services had been requested or provided or that additional payments were due for them: in other words, precisely the type of case as RMK now seeks to advance. The clarity which these provisions sought to achieve about the scope of the services is undermined just as much by a claim framed in restitution as by a claim that the agreement has been varied orally or by conduct. (As Euronav pointed out, RMK’s now-abandoned case of contract variation relied on essentially the same facts and matters as its restitution claim.) The provisions were thus also a form of risk allocation: they meant that RMK could not claim to be providing additional services, and to be entitled to payment, unless those points had been agreed in writing. They accordingly displaced any unjust enrichment claim based on the alleged provision of such services. In addition, given the presence of these provisions, it is not possible in my view to sidestep (as RMK seeks to do) the effect that Lord Leggatt’s observations in Barton about the ‘subject-matter of the contract’ by arguing that additional services cannot be the subject-matter of the contract. Here, any additional services are, in the relevant sense, part of the subject-matter of the contract, which ‘covers the ground’ by stipulating how any such services are to be addressed.

Secondly, even if the analysis above is wrong, the provisions quoted in § 346 above, point significantly against any conclusion that the parties were operating on a joint basis of the kind RMK alleges, i.e. that it was providing additional services for which it would be entitled to payment of an objectively reasonable sum. The whole point of the contractual provisions was not to leave such matters up in the air in that way. A party in Euronav’s position would be presumed, in the light of the contractual provisions, to take the view that the services being provided fell within the scope of the Advisory Agreement unless RMK sought a written change/revision. Against the background of those provisions, it would be inappropriate to find a joint basis or understanding of the kind alleged, unless supported by particularly clear and compelling evidence. No such evidence exists here.

Thirdly, and in any event, even if the evidence is assessed without any presumption of the kind referred to in the preceding paragraph, it does not in my view establish the alleged joint basis.

I have considered the contacts between the parties referred to in sections (E)(6), (8), (10), (11), (13), (15), (17) and (E)(19) above individually. For the reasons given in those sections, I do not consider any of them to indicate a joint basis of the kind alleged.

I reach the same conclusion when I revisit them consider them in the round. I find there to have be no occasion on which Euronav accepted that RMK was working beyond the scope of the Advisory Agreement, or that RMK would have an entitlement to additional payment, or any pattern of contacts from which it could reasonably be assumed that Euronav accepted either of those points. To the contrary, I have found that Euronav indicated that any additional payment would be a discretionary bonus for work done well within the auspices of the Advisory Agreement.

RMK also put forward, in its closing submissions, a new and unpleaded case that there was also a failure of a basis even if Euronav indicated that it would pay a discretionary bonus but then failed to do so, with the result that RMK was entitled to claim a reasonable sum. I am unable to accept that submission. The point was not put to any of the witnesses, and cannot in my view fairly be advanced now. In any event, it fails to take account of the fact that Euronav did, at the end of the transaction, offer a discretionary bonus of US$ 1 million. There cannot have been a failure of basis merely because RMK chose not to accept that offer. The outcome for which RMK contends would be perverse.

For all these reasons, I conclude that there was no joint basis or understanding such as could found a claim in restitution.

The case law on free acceptance, discussed in section (F)(4) above, arises mainly from situations where an anticipated contract does not materialise. They do not focus on the position where, as in the present case, the parties are already performing a contract. In those circumstances, the considerations I refer to in §§ 346-348 must again apply, and, if anything, even more potently than in a case where a joint basis could otherwise be established on the facts. In the present case, given the three provisions of the Advisory Agreement referred to in § 346 above, the dealings (specifically, the contract) between the parties indicated that the basis of any ‘transfer’ was that it was not to be paid for unless a written agreement was made revising the scope of the Services. Further, the terms in which any additional services were requested did not involve any assurance or indication by Euronav that it would be altering the scope of the Services set out in the Advisory Agreement, or that it considered any such variation to be necessary. On the contrary, Euronav’s position, viewed objectively through its communications with RMK, was consistent with the view that it considered the Advisory Agreement to govern all the work being provided and was envisaging only that a discretionary bonus might well be merited at the end of the transaction. By providing any additional services without negotiating a written alteration to the list of Services (and consequent revised remuneration provisions), RMK was taking the risk that those Services would be unremunerated save via such bonus as Euronav in its discretion might agree to pay.

In all the circumstances, it would not be just to allow RMK a claim for additional remuneration on a ‘free acceptance’ basis, even assuming that to be a valid basis in law for a restitution claim.

QUANTUM

In the light of my conclusions as to liability, it is not necessary to assess quantum. Nor, in my view, would it be feasible to attempt to do so as on an alternative basis. Even if I am wrong in the conclusions I reach in section (G) above, it remains the case that large parts of the services RMK provided were covered by the Advisory Agreement and, hence, the remuneration for which it provided. The quantum of any restitution claim would depend on which parts of the services fell outside the Advisory Agreement, as to which there could in principle be almost any number of alternatives. Thus I do not consider that quantum could properly be assessed unless and until the services falling outside the scope of the Advisory Agreement had been identified. That will have to be a matter for another day if and to the extent that, in due course, my conclusions as to liability are held to be incorrect.

CONCLUSION

For the reasons set out in this judgment, RMK’s claim fails and must be dismissed. I am most grateful for counsel on both sides for their cogent and persuasive submissions. Further, I record that the oral advocacy at trial included cross-examination by junior counsel of the Defendants’ expert witness, and commend Mr Leung for his skilful execution of that task.