Post M&A Disputes: Breach of Indemnification Clauses in M&A Contract
Baker McKenzie’s Global Arbitration News has posted an article discussing the difficult questions raised in both substantive and procedural law by indemnification clauses in share purchase agreements.
The author, Dr. Philipp Schuett, explains that the reason is that an indemnification dispute involves at least four parties: “The target company, the third party who raises claims against the target company, the seller (= the indemnitor) and the buyer (= the indemnitee).”
He then discusses the reasons to include indemnification clauses in SPAs, the scope and wording of indemnification clauses, the potential for disputes, and avoidance of post-M&A disputes.