Case Update: Court of Appeal Decision on Sale by Tender by Receivers

SALE BY TENDER: WHEN DOES A CONTRACT ARISE?

Nathalie Ker discusses a Court of Appeal case on a sale by tender by receivers and managers. This article was originally published in Skrine’s Legal Insights Issue 03/2018.

It is common practice for the receivers or liquidators selling the assets of a company to conduct a sale by tender, issuing an Information Memorandum and inviting tenders from various parties. In such a situation, when does acceptance take place and when is a contract formed?

The Court of Appeal delved into these issues in the recent case of Emas Kiara Sdn Bhd v Michael Joseph Monteiro & Ors; Farcoll Estate Sdn Bhd & Ors (Interveners) [2018] 8 CLJ 17 (“Emas Kiara v Monteiro”).

The Court applied the principles of formation of contract to the issue as to whether a contract existed between the Appellant, Emas Kiara Sdn Bhd (“Emas Kiara”), and the 1st and 2nd Respondents who were receivers and managers (“R&M”) of the 3rd Respondent, Lembah Beringin Sdn Bhd (“Lembah Beringin”). Continue reading